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Welcome and thanks for your question!
The amount your friend's son-in-law gives to your friend would be considered a gift and is not taxable.
Thank you very much. I only hope you are certain, and by the way. Will the son-in-law have to pay taxes on the money he's received directly from his winning the settlement.
I am 100% certain that your friend will not have to pay taxes on the gift.
Ok. Very good.
The son-in-law will have to file a gift tax return to report the $25,000, but there is a $5,250,000 lifetime exemption so he won't owe any taxes.
He won't pay taxes on the money he won in e settlement?
It is possible some of the money he won in the settlement may be subject to taxation. It all depends on the legal structure of the settlement. In my experience, wrongful death settlements are usually structured in a way to avoid taxation, but a portion of it may be taxable. Your friend's son-in-law should consult with his attorney on that.
OK. Fine. Again than you very much, indeed. I will now rate you "Excellent." Have a wonderful evening.
You're welcome. Glad I could be of some help.
Have a nice evening yourself