When receiving a settlement for injuries sustained in an automobile accident I am aware that initially it is not taxed.Does that sum at a later time ever become income
and taxed.
2007-03-16 01:32:21 · 4 answers · asked by ababio99 1 in Business & Finance ➔ Taxes ➔ United States
If any of the settlement was for lost wages, then that portion is taxable in the year received.
The settlement otherwise is not taxable, but if you put the funds into an interest bearing account, any interest earned on the settlement would then be taxable.
Publication 525
http://www.irs.gov/publications/p525/index.html
2007-03-16 01:44:06 · answer #1 · answered by Anonymous · 3⤊ 0⤋
Compensatory damages - NO (they are to compensate you for lost $$$)
Punitive damages - YES (to punish the offending party)
The type should be laid out in the settlement.
2007-03-16 03:30:12 · answer #2 · answered by Z28_Zeppelin 2 · 1⤊ 1⤋
Nope.
2007-03-16 02:55:13 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Nope, its allllllll yours.
2007-03-16 01:40:01 · answer #4 · answered by Sane 6 · 0⤊ 0⤋