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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29516
Experience:  Taxes, Immigration, Labor Relations
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I am about to receive a compensatory payment from a lawsuit.

Customer Question

I am about to receive a compensatory payment from a lawsuit. My brother died in the Beirut terrorist attack in 1983.
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: My brother died in Beirut in the terrorist attack on the Marines barracks in 1983.
JA: Is there anything else the Accountant should be aware of?
Customer: We sued Iran and are about to receive compensatory payment. I don't know about the Minnesota tax laws.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 10 months ago.
Category: Tax
Expert:  Lev replied 10 months ago.

To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces.

Expert:  Lev replied 10 months ago.

Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments).

That compensation specifically EXCLUDED from gross income for income tax purposes.

So far - the compensatory payment you are about to receive - will NOT be taxable and will NOT be reported on your tax return.

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