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Are lawsuits taxable?

In: Law & Legal Issues [Edit categories]

Answer:

It depends on what the results are. Usually, because they are compensating you for something you lost, and had supposedly already paid taxes on, there is no tax on the compensation portion. If there are portions of the settlement that are punative, they can be taxed. Consult with your attorney, they should be able to tell you what parts are and are not taxable.

Contributor:

Aggie80

First answer by Aggie80. Last edit by Aggie80. Contributor trust: 4974 [recommend contributor ]. Question popularity: 13 [recommend question].

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