I live in Arizona, but the client this is for is from Kentucky. This happened in Kentucky. Father gave cousin money to give to son who was in jail at the time. Father was alive. By the time the son was out of jail, the father had died. Does the cousin have to do anything tax wise for holding the money in which he spent nothing? Does the son owe any taxes on the money? There never was a will due to it being given before the father past away. Would it be considered a gift instead?
Asked on 2/26/13, 7:26 am
1 Answer from Attorneys
Shad Brown
Dana Law Firm
Receipt of a gift is not income. However, it sounds as if the cousin was holding the money "in trust" for the son. If this is the case, the cousin is required to report any income on trust assets to the IRS.
Answered on 2/26/13, 3:53 pm
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