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LegalGems, Attorney
Category: Estate Law
Satisfied Customers: 7094
Experience:  Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
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Hello I have a settlement. That came in this month from a nursing

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Hello I have a settlement. That came in this month from a nursing home negligence lawsuits for my father which passed away 3years ago in Danville va. I have already set up a administrator estates account. My que. Is will taxes or Irs get involved. With this account? In any way if so what should I do

LegalGems :

Hi; My goal is to provide you with great service - if you have any questions during our chat, please ask! I'll do my best to ensure your satisfaction! These nursing home lawsuits are becoming more common, and are generally categorized as personal injury. From a federal perspective, personal injury settlements are not taxable. However, let me check with Virginia. A few moments please.

LegalGems :

In the meantime, here's some information from the IRS direct, with page 11 and 12 addressing this issue.

LegalGems :

If interest was paid on the underlying sum (as is generally the case), then this portion would be taxable.

LegalGems :

For class actions, generally they will send a letter with a 1099 for the portion that is taxable (simultaneous with the check).

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