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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Mister Fancypants on September 03, 2014, 06:19:07 AM

Title: Lawsuit settlements
Post by: Mister Fancypants on September 03, 2014, 06:19:07 AM

Are all lawsui settlements tax free if not what under what situations are they taxable?

-Mister FancyPants

Title: Re: Lawsuit settlements
Post by: wwweb on September 03, 2014, 06:24:20 AM

Some lawsuit settlements are taxable others are not.  It depends heavily on the type of lawsuit/situation/other tax credits taken.  Here is an IRS publication which gives some of the simpler cases

http://www.irs.gov/pub/irs-pdf/p4345.pdf

edit: I'm assuming that your question refers to US taxes.  I have no idea how lawsuit settlements are taxed in other countries.

Title: Re: Lawsuit settlements
Post by: Mister Fancypants on September 03, 2014, 06:40:17 AM

Sorry yes, US taxes.

Thanks for the link.

That is the most colorful IRS document I've ever seen :)