ANSWERS: 1
-
Settlement money, such as an insurance settlement, is taxable unless it is received for a physical injury or illness resulting from a wrongful act, according to MoneyCentral.com. Therefore, a settlement received as a result of a driver breaking a traffic law, hitting, and injuring someone will be tax-free. A settlement received for a breach of contract will be taxed.
Source:
Moneycentral.msn.com: Win in court without losing to the IRS
Copyright 2023, Wired Ivy, LLC