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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29800
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: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year 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 1 year 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.