Tuesday, December 13, 2011

What to include on a tax return for a ual harment lawsuit?

Have a good professional help you.. ( not an H&R Block type) I had a simialr situation back in 2001 (a lawsuit won)... I also could not figure out why I had to pay tax on what the attorney got directly especially using TurboTax... Wish I could remember exactly what was done but I know our good tax guy filed a special form and deduction.. Our case was a contingent case and we never "laid hands" on the money which I remember he said was very important in order to not claim it as income not sure if tha'ts your situation or not. If you receied the entire check and then wrote a check to your attorney you will have to pay tax the way I understand it... but I could be wrong. Our attorney made sure our settlement was disbursed in a way that we would not have a tax liability for the funds by having the defendents pay him directly.

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