A friend signed over a check to me from a financial institution. The money was from her 401(k) account. Is there any tax implication for me if I deposit the check?

ANSWER

The BIDaWIZ Team's Answer:

There will not be any tax implication for you. However, this may not be the case for your friend. This transaction would be treated as a gift for tax purposes. If the amount is in excess of $14,000 if they are a single filer or $28,000 as a married filer, they will need to file a gift tax return form 709. In addition, your friend will likely be subject to taxes as a result of the distribution and a penalty if it was an early distribution. If the distribution was made in 2014, your friend would need to report it on their 2014 tax return.