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August 1, 2024
Question

Insurance proceeds from litagation

  • August 1, 2024
  • 2 replies
  • 0 views

I recently won in mediation a lawsuit due to an automobile accident.  The proceeds are not from physical damages but from emotional distress.  Is the award taxable income?  

    2 replies

    DoninGA
    Employee
    August 1, 2024

    Damages for mental distress and emotional anguish are taxable unless received for a physical injury

    Employee
    August 1, 2024

    It depends on whether the mental distress was the result of a physical bodily injury to yourself (non-taxable) or the result of damage to your property or a stressful situation or bodily injury to someone else (taxable).