Legal Question in Tax Law in Utah

tax penalties

My husbands aunt passed away 2 months ago and gifted us 10 thousand dollars which we put into a cd. She didnt want her son to know as he is selfish and after her death he found out and wants the money returned. Being tired of his phone calls about the money we are willing to give it back to his father. But as it is in a cd their will be taxes and penaties for early withdrawl. Which we will not pay and will come out of the 10 thousand. I want to know if we will have later tax isues as we had the money and then poof we dont. I also want to know the best way to leagaly protect us in giving the money back as in a reciept of cash received from the father . So perhaps we have proof it was return for all who would question the were abouts of the 10 thousand .

Thank you for your time.

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Asked on 5/18/04, 4:29 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: tax penalties

You did not give any info as to whether the money was gifted before or after the aunt passed. I assume before, in which case you are entitled to the money - and as a gift no income tax is payable on the gift. However, if you earn interest from the gift, you must pay taxes on the gift. As far as how to return the money, it should be paid into the estate of the Aunt. There should be some sort of probate, executor or trustee. I suggest that you do not return any money until you have learned everything about her estate, wills, trusts etc, and are certain that the money will be used as she intended. At that time, you can return the funds or assign the CD, together with a release and hold harmless agreement from the family member(s) in charge of her estate. You are welcome to call for a free consultation.

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Answered on 5/18/04, 5:52 pm


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