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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4046
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I am receiving money from my attorneys trust account that he

Customer Question

I am receiving money from my attorneys trust account that he was holding for a creditor, taxes were paid on this money prior to it being placed in his account. Will I have to pay taxes on this money again and if I cash this check at the attorneys bank will they notify the irs that I have cashed this check?
Submitted: 2 years ago.
Category: Tax
Expert:  Stephen G. replied 2 years ago.

Stephen E. Grizey :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.

Stephen E. Grizey :

No. You shouldn't have to pay taxes on this money a second time.

Stephen E. Grizey :

How much is the check going to be for?

Customer:

The amount is for $ 50,000.00 What steps do I need to take in order to prevent paying taxes the second time? Is there any forms I will need to fill out for IRS in the event a bank attempts to report this as some type of income?

Stephen E. Grizey :

The bank doesn't do this that of reporting. A couple of things come to mind if you are concerned about cashing that large of a check.

Customer:

such as?

Stephen E. Grizey :

One, & the best way to handle this would be to simply deposit the check in your own bank account & either make withdrawals less than $10,000. at one time; or you might ask your attorney to give you multiple checks for amounts under $10,000. and then you could cash or deposit the checks one at a time.

Stephen E. Grizey :

When your dealing with checks from an attorney's trust account, there's not much to be concerned about; hundreds of thousands of these type of checks are cash every day in the United States.

Customer:

is not true that once the deposit is made on any amount over $10,000.00 that it is reported to the IRS?

Stephen E. Grizey :

No. Not unless you deposit cash; many, many checks over $10,000. are deposited every day, in fact millions of them; if they had to be reported, the IRS would be buried in paperwork. They wouldn't begin to have the staff to even look at the reports.

Stephen E. Grizey :

In fact many deposits of cash over $10,000. are exempt from reporting; supermarkets, betting from tracks, gambling operations, basically anyone who regularly makes cash deposits in excess of $10,000., do to the nature of their business.

Stephen E. Grizey :

There really isn't cause for concern.

Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4046
Experience: Extensive Experience with Tax, Financial & Estate Issues
Stephen G. and other Tax Specialists are ready to help you

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