Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I have received a payment from a qualified settlement fund…

I have received a...

I have received a payment from a qualified settlement fund because my home was in an area that was very close to the Rocky Flats /Dow Chemical & Rockwell Intl plant. Is this payment taxable to me? Should I expect to receive a 1099? If I don't receive a 1099 from anyone does that mean NO Tax is owed? Respectfully submitted,

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

Accountant can't find the answer at the library that address's this issue

Show More
Show Less
Ask Your Own Tax Question
Answered in 14 minutes by:
3/11/2018
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Ask Your Own Tax Question
Customer reply replied 1 month ago
Thank you I'm standing by

No you should not expect to receive a 1099 for this. Whether any is taxable depends on your specific situation.

  • If you suffered a loss in value of the property and the settlement is less than the adjusted basis (cost + improvements - depreciation) of your property, then the settlement payment is not taxable and does not need to be reported on your tax return. However, you must reduce your basis in the property by the settlement amount you received.
  • If your settlement payment exceeds the basis of your property, then the excess will be considered income and you will include the excess portion in your return by following the steps listed below.
    • If you sold the property, you will need to adjust your basis and report the excess as gain on Schedule D of your personal income tax return.
Ask Your Own Tax Question
Customer reply replied 1 month ago
Can you tell me anything about IRS Code 468B? and how it applies to my question

That dealt with how the money had to be managed.

The settlement fund had to be managed in a way consistent with Treasury Regulation Section 1.468B-1. The settlement fund had to invest the money to earn some interest income, and any taxes due as a result of earning the interest had to be paid from the settlement fund itself.

That way no taxpayer (such as yourself) would be taxed on any interest.

Ask Your Own Tax Question
Customer reply replied 1 month ago
I'd like to share your answers with my tax consultant and get her take on them and get back to you in a few minutes can I do that?

Ok I will wait

Ask Your Own Tax Question
Customer reply replied 1 month ago
Thank you, I'll be right back

Ok

Ask Your Own Tax Question
Customer reply replied 1 month ago
Ok Robin I'm back...I just talked with her and told her to read her email I just sent and let me know what she thinks...sorry I took so long already but I should hear back from her shortly please stand by a moment longer

Ok

Ask Your Own Tax Question
Customer reply replied 1 month ago
Hi again Robin, I just spoke to her again and she said that after a little more research she found out I need to get a form 1120s-sf and the instructions. Can you provide me with that or point me in the right direction to get it?

I will give it to you but you do not file the form. The settlement fund files it.

All section 468B designated and qualified settlement funds must file an annual income tax return on Form 1120-SF. The return must be signed and dated by the administrator of the fund.

That is not for you but here is the form

https://www.irs.gov/pub/irs-pdf/f1120sf.pdf

Here are the instructions

https://www.irs.gov/pub/irs-pdf/i1120sf.pdf

Ask Your Own Tax Question

https://www.irs.gov/pub/irs-pdf/i1120sf.pdf

That is the link to the instructions.

Ask Your Own Tax Question
Customer reply replied 1 month ago
Ok, thank you I'll pull it up and print them out. One more question How do I go about determining if I lost any property value? and I was under the impression that the settlement was compensation for "Lost Property Value" and/or "Lost use of land"

I was going to say that your tax consultant would know but after the form request, the loss in value is what you were paid for. You look to the value back at the time of the event or just before then what the value was after. Then you follow my instructions from my first post.

I really cannot stress enough that the 1120 SF is not for you to file. Just want to make sure you realize that.

You are most welcome.
A positive 5 star rating is appreciated so I am credited for assisting.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
Robin D. and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 1 month ago
YOU GOT IT...Great Job...If no one has told you that you were doing a good job today....YOU ARE

Thank you I appreciate that.

Ask Your Own Tax Question
Was this answer helpful?
Ask Robin D. Your Own Question
Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
17,610 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

Robin D. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,451 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

56 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

17,610 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
VA income tax return form 760, Line 16, “ Taxable Income -
VA income tax return form 760, Line 16 , “Virginia Taxable Income - Subtract Line 15 from Line 9” what are the two bubbles “DTD” and “LTD” ? Should I fill in one ?… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I cant find a form 1041 Schedule G and Schedule D says enter
I cant find a form 1041 Schedule G and Schedule D says enter my Tax on all taxable income on Form 1041, Schedule G, Line 1a … read more
Dr. Arthur Rubin
Dr. Arthur Rubin
Doctoral Degree
172 satisfied customers
Child and Dependent Tax Form 2441 Error: IRS Rejected return
Child and Dependent Tax Form 2441 Error: IRS Rejected return due to dependent's social security number being used on someone else's From 2441. Child is my dependent this tax year, I am Head of Househo… read more
Shan-Nel Simmons
Shan-Nel Simmons
Tax Professional/Owner
Master\u0027s Degree
43 satisfied customers
I have a question relating to Schedule D and calculation of
I have a question relating to Schedule D and calculation of capital gains and property depreciation on a home sale in 2017 … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,043 satisfied customers
A couple is filing their 2017 PA-40 personal income tax
A couple is filing their 2017 PA-40 personal income tax return. They had their first child in 2017. The father sets up a 529 account titled in his name fbo the child. The father contributes 14k into t… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,043 satisfied customers
It has to do with depreciation on rental property.
It has to do with depreciation on rental property. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
17,610 satisfied customers
Does 1250 depreciation recapture rules apply if a property
Does 1250 depreciation recapture rules apply if a property is sold at a loss AND depreciation was not taken on the property. The difference between the adjusted basis (had depreciation been taken) and… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
45 satisfied customers
Will the IRS accept a 1099-Misc as compensation as officer
Will the IRS accept a 1099-Misc as compensation as officer on an S-Corp? Client didn't need up getting payroll set up and does not have a W-2. What do I do here?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,906 satisfied customers
How do you decide whether to use schedule d worksheet versus
how do you decide whether to use schedule d worksheet versus line 44 work sheet in 1040 instructions … read more
Robin D.
Robin D.
Senior Tax Advisor 4
17,610 satisfied customers
I am amending my 2016 tax return schedule D, to bring some
I am amending my 2016 tax return schedule D, to bring some stock loss from 2015 so I can use in 2017 return. Do I need to file an 2017 extension until I get that amendment approved? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Can you claim interest or depreciation on a rental property
Can you claim interest or depreciation on a rental property if the tenant is a relative and the relative pays the mortgage and interest and insurance? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
17,610 satisfied customers
I don't know how to fill out the schedule d tax worksheet or
I don't know how to fill out the schedule d tax worksheet or qualified dividends and capital gain tax worksheet … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
How does IRS return an unsigned tax form? How does IRS
Hello How long does IRS return an unsigned tax form? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,906 satisfied customers
I have a S corp. When filing taxes with my personal income,
I have a S corp. When filing taxes with my personal income, shall I file k1 or schedule C or both? How do I claim a real estate professional in the tax return?… read more
Carter McBride
Carter McBride
LLM
957 satisfied customers
If we received compensation for property acquired by the
if we received compensation for property acquired by the county for road improvement project do we have to pay taxes on that money … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Is there any tax benefit to depreciating a rental property
Is there any tax benefit to depreciating a rental property held in an LLC in a Solo 401k? Do I even need to depreciate at all since the balance is below $250k?If there is no benefit, is there some way… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
How do I figure out depreciation for my income tax return? A
How do I figure out depreciation for my income tax return? A friend recently died owning tillable and productive farmland with no buildings. The farmland was appraised by a licensed appraiser. He did … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
916 satisfied customers
On Form 706 Schedule D, if the proceeds were paid directly
On Form 706 Schedule D, if the proceeds were paid directly to a funeral home to pay for funeral expenses should the face value of the policy be included on this schedule? Also should the funeral expen… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
45 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x