Tax
Apr. 21, 2011
Non-Taxable Settlement Proceeds Require Careful Documents
Without a carefully drafted settlement agreement, the Internal Revenue Service can step in and take away certain tax deductions. By Bruce Givner and Owen Kaye of Givner & Kaye.
Taxpayers have been reminded often of the need to carefully document the nature of the money received as judgments or in settlements. Apparently, more reminders are needed.
Generally, taxpayers start at a disadvantage because "gross income" is broadly defined to include "all income from whatever source derived" except as specifically provided in the Internal Revenue Code Section 61(a). On top of that, &q...
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