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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 11813
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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My friend is receiving a settlement of 1.5-2.5 million

Customer Question

My friend is receiving a settlement of 1.5-2.5 million dollars and she wants to put it in my name so her family doesn't know about it. How much in taxes will I have to pay on the money per year? Including Federal, state etc.
My friend was told that she wouldn't have to pay taxes on her court case settlement. Would I have to pay yearly taxes if she put the money in my bank account? If so, how much and to whom?
Would I have any other liabilities from this transaction?
What if I put some of the money into college funds for the children?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.



Your friend likely WILL be taxed unless this is a personal injury settlement, OR other injury arising out of injury, sickness, or wrongful death


Regardless of that .. Your tax will only be the tax that arises from interest or dividends. The bank will send you a 1099-int in January of each year for the interest the account earns.