Hello,

Is payment of a litigated, probate, settlement considered taxable income by either federal or state governments? Judgement issued in Nevada, payment is to a
Michigan resident. Thank you for your time and help.

A part of settlement may be taxable. Read settlement - taxability, Your U.S. Tax Return: The U.S. Income Tax Topics 1

For sure, punitive part of the settlement is taxable.

Compensation for injury normally is NOT taxable, though mental distress is NOT considered to be an injury for tax purposes.

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Originally Posted by MukatA

A part of settlement may be taxable. Read settlement - taxability, Your U.S. Tax Return: The U.S. Income Tax Topics 1

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Great answer!! Thank you, sincerely, mike

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Originally Posted by AtlantaTaxExpert

For sure, punitive part of the settlement is taxable.

Compensation for injury normally is NOT taxable, though mental distress is NOT considered to be an injury for tax purposes.

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Outstanding answer!! Thank you very much, mike

Glad to help!