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Sorry for you loss.
Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments).
That insurance settlement is NOT taxable.Please verify that the insurance settlement is NOT reported on form 1099misc.
Sometimes payers report such payments on form 1099misc.
If that is a case - you woudl need to contact the payer and ask for correction.
That payment should NOT be reported.
Please verify that the insurance settlement is NOT reported on form 1099misc.
Otherwise - you are OK - and do NOT need to include that amount into your tax return.
Let me know if you need any further clarification this matter.