irs question?

1 ⤊

do you have to report settlement award for damage caused by the builder?:

2007-01-28 10:15:24 · 2 answers · asked by volkswagenf 1 in Business & Finance ➔ Taxes ➔ United States

2 answers

Was any of the settlement paid to compensate for lost wages?
If so then the portion related to lost wages is taxable. otherwise it is not included as income.

2007-01-28 10:20:39 · answer #1 · answered by Anonymous · 1⤊ 0⤋

If you are talking about damages from suing or threatening to sue the builder of your house, no the damages go to reduce the tax basis of the house. If the damages exceed the basis, there would be capital gain.

2007-01-28 21:39:18 · answer #2 · answered by mattapan26 7 · 0⤊ 1⤋