Simpsonville, SC asked in Tax Law and Wrongful Death for South Carolina

Q: My mother is receiving a settlement for my father's wrongful death. Can she gift that money to her children tax free?

She would like to disperse the money to the six children when she gets the settlement, but is concerned we will have to pay taxes.

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1 Lawyer Answer
David Ostrove
David Ostrove
  • Tax Law Lawyer
  • Los Angeles, CA

A: Typically, if the amount your mother received was for bodily injuries, it is not subject to income tax. Any portion for loss of income typically is subject to income tax. Depending on the amount of the award, if your mother gifts it to her children, there is no gift tax. It depends on the amount gifted to the children.

You should see a local tax lawyer.

Your issues are not difficult ones.

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