<prompt> Human: So I won a settlement in court with a 49k judgement. Can I gift that check to my wife to avoid paying any taxes on it?  <response>: With the exception of punitive damages, most lawsuit awards or settlements carry no tax obligation. Those awards are intended to make you whole, or return you to the state you were in before being wronged. There is no tax obligation because youre having what is rightfully yours returned to you.The IRS has put together a guide to determine if your settlement carries any tax obligation. You can view that here: Gifting the check to your wife will not absolve you of any obligation if it exists. Im sure you can imagine how such a system would be rife with abuse. 