Lawsuit Settlements
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Don’t Settle For Less
If You Received Funds From A Lawsuit, You Probably Have Questions Regarding Legal Payments And Settlements Related To The Disaster You Experienced.
- Is a lawsuit settlement payment a taxable payment?
- Are lawsuit settlement payments exempt from being treated as income for state or federal benefit programs?
- Will someone issue a Form 1099 to me as a plaintiff for payments that I receive from the settlement?
Unfortunately, no organization, including the Fire Victim Trust, is offering clear-cut answers to these questions. In fact, the answers to these questions may vary from person to person based upon a wide variety of circumstances, including:
- Whether there was damage to a residence
- Exactly what losses were claimed
- Exactly how much insurance has paid for damages
- Whether there’s a claim for emotional stress
- What extraordinary circumstances are involved in your claim
- And many more!
Claimants should be aware that it is possible to owe taxes on a portion or even all of the settlement — including amounts paid to attorneys!
Attorneys should be aware that the tax implications of a settlement can be extremely complicated and warrant the advice of a tax professional with many years of experience in disaster claims.
- The IRS does not have consistent guidelines for Trust Fund payments
- Pertinent rules are drawn from Tax Court cases as well as the Internal Revenue Code
- A Judge’s non-judicial ruling does not override an IRS determination
These payments are part of your overall settlement including payments received from your insurance company.
Don’t delay! John Trapani, CPA has the experience to answer these questions so that you avoid disastrous tax consequences.
Call (805) 497-4411 today!
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(805) 497-4411
John@TrapaniCPA.com