settlement on wrongful death
Do I pay taxes or declare income on settlement on wrongful death lawsuit on my mother who sustained fatal injuries leading to her death? There were no punitive damages.
Re: settlement on wrongful death
To answer the question accurately I would need more information.
Was the money paid to you individually or to her estate? if to the estate then an estate tax return may be necessary.
Was the money paid for physical injuries to her? if so, to the extent related to physical injury those amounts should be excluded from income tax. Those amounts representing lost income and emotional distress are taxable as income. The issue becomes whose lost income and whose emotional distress.
Wrongful death for federal tax purposes is generally excluded from income tax. without actually reading the judgment or settlement, I can not give you a definitive opinion. Your attorney in the wrongful death action should know the answer.
