Do i have to report lawsuit money on income tax return?
Answer:
There are a number of factors that would determine the taxable amount of a legal judgment. Is the money you received all repayment for a loss or was part of the judgment for punitive damages? Was this a personal matter or business. The factors are too numerous to detail them all. If you want a more specific answer you will need to provide more information.
yes
It depends on the suit. Ask your attorney. They will tell you.
All punitive damages are considered income and are reported and taxed.
As far as compensatory damages, most compensatory damages are considered income and are reported. You do not have to include compensatory damages for injury or sickness. (But all punitive damages for injury or sickness are included.) Each piece of a compensatory damage payment will have to be looked at individually to determine if it is reported or not.
compensatory (by definition) damages are not taxable but punitive are
Punitive damages are taxable. Compensation for something you would have paid taxes on (IE lost wages) is taxable. Compensation for something you would not have paid taxes on (IE lost limb, damaged property) is not taxable.
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: