Solved
Is a judgement award in amount of $10,622.00 in the Ramirez V Regional Acceptance Corporation Class Action lawsuit. Is this amount considered taxable income for 2016?
No text available
Being unfamiliar with the specifics of the cited case, I cannot provide a definitive answer. The general rule, taken from IRS Pub. 525 Taxable and Nontaxable Income, should help you decide whether your judgment is taxable income.
"Court awards and damages. To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. Include the following as ordinary income.
1. Interest on any award.
2. Compensation for lost wages or lost profits in most cases.
3. Punitive damages, in most cases. It doesn't matter if they relate to a physical injury or physical sickness.
4. Amounts received in settlement of pension rights (if you didn't contribute to the plan).
5. Damages for:
a. Patent or copyright infringement,
b. Breach of contract, or
c. Interference with business operations.
6. Back pay and damages for emotional distress received to satisfy a claim under Title VII of the Civil Rights Act of 1964.
7. Attorney fees and costs (including contingent fees) where the underlying recovery is included in gross income.
Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments).
Emotional distress. Emotional distress itself isn't a physical injury or physical sickness, but damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. Do not include them in your income.
If the emotional distress is due to a personal injury that isn't due to a physical injury or sickness (for example, unlawful discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders."
Enter your E-mail address. We'll send you an e-mail with instructions to reset your password.
©1997-2022 Intuit, Inc. All rights reserved.
Intuit,
QuickBooks, QB, TurboTax, ProConnect, and Mint are registered
trademarks
of Intuit Inc. Terms and conditions, features, support, pricing,
and service options
subject to change without notice.
Security
Certification of the TurboTax Online application has been
performed by
C-Level Security.
By accessing and using this page you
agree to the
Terms of Use.
Accessibility
