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The part of the payment above your original loan amount would be taxable if you paid back the loan or the $5000 originally borrowed. You may claim attorney fees on Schedule A that you paid to receive this taxable income.
Generally unless the payment was for physical injury it is taxable.
Settlements are only nontaxable when the "wrongful act" causes physical injury. In physical injury settlement the award is not taxable.
This was under usury laws (where too excessive interest is charged).
Unless physically injury is involved or your were paid to reimburse you for loss of value in property, tha amount is taxable.
IRC § 104