What is taxable in Personal injury settlement under the US tax code?
Posted by MarkJun 6
I’m suing my landlord/his insurance company, because a few years ago I fell down a common stairwell after the landlord had removed the carpeting, but not the nails. I have a good personal injury attorney, but she’s not sure about tax questions.
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the money awarded is non taxable. now bear in mind that should you have any capital gain on it that certainly is.
you do not have to declare the award in your ta return.
i hope this answers your question.
How good can a personal injury attorney be if he doesn’t understand the tax implications of a settlement? It seems that would be a basic consideration when contemplating a settlement.
u don’t have to pay taxes on the amount awarded for personal injury. punitive damages must be included in your gross income. if you have compensatory damages, you exclude the amount given for physical personal injury.