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    onetimemike's Avatar
    onetimemike Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Nov 25, 2008, 05:38 PM
    Taxable income or not
    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.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Nov 26, 2008, 12:13 AM

    A part of settlement may be taxable. Read settlement - taxability, Your U.S. Tax Return: The U.S. Income Tax Topics 1
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Nov 26, 2008, 07:46 AM
    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.
    onetimemike's Avatar
    onetimemike Posts: 3, Reputation: 1
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    #4

    Nov 26, 2008, 10:12 AM
    Quote Originally Posted by MukatA View Post
    A part of settlement may be taxable. Read settlement - taxability, Your U.S. Tax Return: The U.S. Income Tax Topics 1
    Great answer!! Thank you, sincerely, mike
    onetimemike's Avatar
    onetimemike Posts: 3, Reputation: 1
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    #5

    Nov 26, 2008, 10:13 AM
    Quote Originally Posted by AtlantaTaxExpert View Post
    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.
    Outstanding answer!! Thank you very much, mike
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Nov 26, 2008, 01:19 PM
    Glad to help!
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