Tax
Aug. 1, 2016
Are Insurance Bad Faith Recoveries Taxable?
The answer depends on a number of factors.
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.
If you recover a judgment for bad faith damages, is the monetary recovery taxable?
The annoying answer is that it depends. This answer may be a bit less annoying with a brief description of what a bad faith cause of action may entail. It may be a tort or a contract claim, depending on the facts and the jurisdiction, though since 2012, that tort vs. contract distinction is now irrelevant to the tax treatment.
A bad faith claim is often brought against one's own insuran...
For only $95 a month (the price of 2 article purchases)
Receive unlimited article access and full access to our archives,
Daily Appellate Report, award winning columns, and our
Verdicts and Settlements.
Or
$795 for an entire year!
Or access this article for $45
(Purchase provides 7-day access to this article. Printing, posting or downloading is not allowed.)
Already a subscriber?
Sign In