Tax
Jul. 15, 2016
Is your insurance bad faith recovery taxable?
It can depend on numerous variables. Does it amount to a compensatory recovery for physical injuries or physical sickness (tax-free)? Is the recovery punitive in nature (taxable, even if the injuries are physical)?





Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
Are insurance bad faith litigation recoveries taxable? It can depend on numerous variables. Does it amount to a compensatory recovery for physical injuries or physical sickness (tax-free)?
Is the recovery punitive in nature (taxable, even if the injuries are physical)? If the case arises out of health or disability insurance, it may be taxable or not, often depending on who paid the premiums for the policy. Sometimes, a ke...
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