2007-07-26 14:49:27 · 4 answers · asked by kidzmom 1 in Business & Finance ➔ Taxes ➔ United States
I assume the lawsuit was about making them pay you benefits due. Insurance benefits are not taxable (except for investment returns as in whole-life insurance). If you collected damages for court costs or other losses, including pain and suffering, those aren't taxable either. If you won punitive damages in your lawsuit, then those would be taxable.
2007-07-29 13:10:10 · answer #1 · answered by Houyhnhnm 6 · 0⤊ 0⤋
I believe so. I think it will be considered income or something along those lines. Put it this way, if in January/February 2008 you receive tax forms from the settlement (providing you received it this year), then more than like you will need to claim it on your taxes. If not, don't worry - the IRS will soon be calling for you.
2007-07-26 14:53:06 · answer #2 · answered by Michelle 4 · 0⤊ 1⤋
Under Section 104 of the Internal Revenue Code - you don't have to report income related to: (1) amounts received under workmen's compensation acts as compensation for personal injuries or sickness; (2) the amount of damages received on account of personal physical injuries or physical sickness.
I would not just report what is reported on any IRS forms. If the amount you got is substantial I would consult a good CPA.
2007-07-26 16:43:04 · answer #3 · answered by Glenn S 1 · 2⤊ 0⤋
In my case the answer was no but I would check with a CPA before doing anything.
2007-07-26 14:53:14 · answer #4 · answered by BILL 7 · 1⤊ 0⤋