2007-02-13 04:06:02 · 7 answers · asked by jeremiah r 1 in Business & Finance ➔ Taxes ➔ United States
No, mental patients belong in the hospital or behind bars.
2007-02-15 01:50:07 · answer #1 · answered by Anonymous · 0⤊ 1⤋
That depends upon what it was for. Since you didn't divulge that information it's not possible to say.
Settlements for direct losses (fire, theft, auto accident damage) generally aren't taxable. Settlements for injuries and illness are not taxable.
If any of the settlement was for lost wages or punitive damages for an injury or illness, that portion IS taxable as ordinary income.
If it was a settlement for in indirect loss such as libel or slander or mental stress, it's fully taxable.
If I haven't covered it here, get a copy of IRS Pub 525 from the IRS website. It should answer your question.
2007-02-13 04:30:10 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
it all depends on what the settlement was for:
After August 20, 1996 a legal settlement or court award received is only tax free if on account of physical injury or physical sickness. Include the following as ordinary taxable income on your tax return:
Interest on any legal settlement or court award;
Compensation for lost wages or lost profits in most cases;
Punitive damages;
Amounts received in a legal settlement or court award of pension rights
(if you did not contribute to the plan);
Damages for:
Patent or copyright infringement;
Breach of contract;
Interference with business operations;
Any legal settlement or court award under the Age Discrimination in Employment Act.
Do not include in your taxable income on your tax return a legal settlement or court award for compensatory damages for personal physical injury or physical sickness.
Emotional distress is not considered a physical injury or sickness; therefore, a legal settlement or court award for emotional distress is includable in taxable income on your tax return. However, a legal settlement or court award up to the amount paid for medical care expenses attributable to emotional distress are tax free and do not need to be included on your tax return.
2007-02-13 04:42:45 · answer #3 · answered by NJchick 3 · 0⤊ 0⤋
Did you receive the settlement in 2007? These are 2006 taxes. You wouldn't neeed to put it on 2006 taxes if they were received in '07!
2007-02-13 04:17:41 · answer #4 · answered by JusME 2 · 0⤊ 1⤋
Settlements for personal injury are not taxable. If it is for a casualty loss it reduces the casualty loss and again would not be taxable. All other settlements are generally taxable.
2007-02-13 04:26:19 · answer #5 · answered by waggy_33 6 · 1⤊ 0⤋
Any time you recieve income that will be reported to the IRS, you had better claim it. Now, if you had attorney's fees associated with this settlement, you can claim those fees.
good luck
2007-02-13 04:11:26 · answer #6 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 1⤋
Lawsuit settlements are not taxable. Is it from a lawsuit?
2007-02-13 04:14:09 · answer #7 · answered by Get a life 3 · 0⤊ 2⤋