My 15 month old son passed as a result of an incompetant pediatrician. A medical malpractice lawsuit was filed and now the pediatrician wants to settle out of court. I 'may' agree to it but as part of my decision making process I need to know if I have to pay taxes on any settlement I receive out of court.
ProfessorC
As far as I know proceeds from these types of cases aren't taxable. Do an anon call to the IRS to be sure.
Steve
I believe that they are fully taxable. Also, you can write off your lawyer's fees as an itemized expense.
If you have a lawyer working with you on the case. Ask the lawyer and get their answer in wiriting. That is one of the services that should be included in their fees for the lawsuit.
r2mm
It depends on the type of settlement. If the settlement is a reimbursement of expenses, it is not usually taxable. "Pain and suffering" amounts are generally taxable to the recipient.
Rob
Per Publication 525 amounts paid for injury, and loss of limb or life are not taxable income. If any portion of the settlement is for lost wages then that portion would be taxable. Check with your attorney to verify how the settlement is being issued. If it was in total for the loss of your son's life then it would not be taxable to you
http://www.irs.gov/publications/p525/ar02.html#d0e4598
http://www.irs.gov/publications/p525/index.html
Orignal From: Do I have to pay taxes on an out of court settlement?
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