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If the settlement is truly going to the other person (she will get the 1099), and you are not a party to the lawsuit, then she will be responsible for any taxes due - and this will be determined on what sort of damages are paid
If she simply give you $215,000 ( without the expectation of anything in exchange ) this will be a GIFT ... there is a $5,250,000 exemptions on gifts give (the giver of the gift pays this transfer tax), ... so she will have no taxes there (UNLESS she has already given over $5,000,000 in her lifetime)
She WILL, however, have to file a gift tax form Form 709 - Internal Revenue Service to report the gift, so that it can be tracked against that lifetime exclusion
And as far as any INCOME tax on the gift you will have none: Here's your tax code citation:
None whatsoever ... only the GIVER has to file anything. Gifts are excluded from income And the GIVER of the gift only has to pay any gift transfer tax, once they've given over a certain amount for life ... the number will go up over time...If she died in 2012, the amount would have to be over $5,250,000 for there to be any tax againt her estate
NOW, your only risk whatsoever would be if you povided some sort of service in exchange for this money.. THE the IRS would say that it is income .. but, again, if she is giving it without any expectation of anything in exchange from you, it is a gift and therefore not taxable to you at all
You will, of course, have to pay tax on any dividends or interest on the money, once you have it invested or in the bank
You're very welcome
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Because you said ..."So I will not had to pay any taxes or jump through any hoops upon receiving the money and in the future?" I was just pointing out that if you put this money in the bank, you get that 1099-int and have to pay tax on that,as you would with any other money. That's all ... Lets say that you put $200,000 in the bank this year and it earns 1% interest, you would make $2000 in interest and have to report THAT on your return for the next year