Settlements. Taxable?

[Jiggers]

Client took some medicine and she had severe reaction to it.

The medical company issued her a check to settle, to prevent a lawsuit, obviously.

Retired person, not for wages. Not to pay medical bills.

Taxable?

[ChEAr$]

Client took some medicine and she had severe reaction to it.

The medical company issued her a check to settle, to prevent a lawsuit, obviously.

Retired person, not for wages. Not to pay medical bills.

Taxable?

it's for potential personal injuries; non taxable.

[jimmcg]

Client took some medicine and she had severe reaction to it.

The medical company issued her a check to settle, to prevent a lawsuit, obviously.

Retired person, not for wages. Not to pay medical bills.

Taxable?

She would have had to sign a release prior to receiving the check. What type of injury did the release document stipulate that the check was for? Physical injury v mental injury?

[Jiggers]

She would have had to sign a release prior to receiving the check. What type of injury did the release document stipulate that the check was for? Physical injury v mental injury?

She doesn't remember. She saw the $$$$ sign, signed, mailed everything back without keeping a copy or having her lawyer review!

[jimmcg]

She doesn't remember. She saw the $$$$ sign, signed, mailed everything back without keeping a copy or having her lawyer review!

Sounds like some of my clients!

[Jiggers]

it's for potential personal injuries; non taxable.

Thanks, Harlan.

Personal injuries. It might be part of a class action settlement, and according to TheTaxBook, not taxable.

My mind was muddled. Boss had just finished baking apple pie at the office and served with vanilla ice cream. About to fall asleep now!

[New York Enrolled Agent]

Thanks, Harlan.

Personal injuries. It might be part of a class action settlement, and according to TheTaxBook, not taxable.

It's not enough to just say personal injury.

It is difficult to determine whether or not the settlement is taxable without knowing all the facts. To be not taxable, the settlement must be a result of personal physical injury as per §104(a).

[Davc]

The OP said she had a severe reaction. Sounds physical to me.