I have a settlement and confidentiality agreement for personal injury. They did not allocate the monies. How do I determine tax?

Attorney answers (6)

1. Licensed in FL

   

   Karen MunzerPro

   Miami Divorce / Separation Lawyer

   Contributor Level 14

   

   EmailVisit website

   5

   Lawyers agree

   Answered February 25, 2013 11:44. You are entitled to speak with a tax professional regarding the tax implications of the structuring of your settlement. My colleagues are correct in that generally personal injury settlements are non-taxable, but depending on how the settlement is worded or funds allocated there may be tax implications. Have a consultation with a tax attorney or CPA. Good luck.

   ** LEGAL DISCLAIMER ** This response above is not legal advice and it does not establish an attorney-client... more** LEGAL DISCLAIMER ** This response above is not legal advice and it does not establish an attorney-client relationship. When responding to questions posted on Avvo, a general purpose response based on Florida law is provided. All relevant background details or facts related to your issue / matter is not available. Therefore, I am not in a position to give you legal advice. Further, the review, use of, or reliance upon my response does not establish an attorney-client relationship. For specific advice regarding your particular circumstances, you should consult and retain local counsel. Karen Munzer, PLLC, www.karenmunzer.com, E-Mail: kmunzerlaw@aol.com , Tel: (786) 501-6655 less

   • Mark as helpful
   • Flag
2. 

   Clayton WalkerPro

   Anchorage Business Attorney

   Contributor Level 13

   

   EmailVisit website

   6

   Lawyers agree

   Answered February 25, 2013 10:54. Despite the confidentiality clause you are entitled to speak with a CPA and an attorney regarding the issues of tax compliance. Both of those parties owe you a duty of confidentiality. You should first speak with your attorney. They may have allocated the the money based on the wording of the agreement. They may also refer you to a tax attorney or cpa that they use for consulting on these issues. Your attorney likely will help you on this issue.

   You have asked us to state an opinion based upon stated facts. You have not provided us with any documents,... moreYou have asked us to state an opinion based upon stated facts. You have not provided us with any documents, pictures, witness statements or other admissible evidence. The opinions stated are based upon general principles of law unless otherwise stated, which may or may not be applicable in your jurisdiction. Controlling law is also subject to change or reversal at any time. Any such changes may be retroactive and could significantly modify the statements and opinions expressed herein. Similarly, any change in the facts and assumptions upon which this opinion is based could modify the conclusions. We opine only as to matters expressly set forth, no opinions should be inferred as to other matters or to treatment of matters not specifically addressed. This opinion represents our best judgment as to the probable outcome of the issues discussed and is not binding on the courts or upon your adversaries. We can give no assurance that an adversary would not challenge our conclusions and prevail in the courts in a manner to cause adverse consequences. With respect to some of the matters discussed in the opinion, existing legal precedent may provide very little legal guidance. Although the opinions and views expressed are based on our best interpretations of existing law and what we believe a court would probably conclude if presented with the applicable issues, we can give no assurance that our interpretations would be followed if the issues became the subject of judicial or administrative proceedings. Realization of certain benefits described is subject to the risk that a tenant may challenge the treatment and that a court may sustain the challenge. Because you may bear the burden of proof required to establish a fact, the opinions expressed assume the you will undertake the effort and expense to present fully the case in support of any matter that you have asserted and an opponent might challenge. None of the advice provided here may be used to avoid tax liability, interest or penalties. If you want that level of assurance you will need to allow us to perform the full opportunity to explore the facts and law applicable to your specific circumstances. I provide answers here to allow people to see the style of communication and type of analysis applied to factual statements. less

   • Alaska Law Offices, Inc.

   • Mark as helpful
   • Flag
3. 

   Joseph Brophy

   White Plains Ethics / Professional Responsibility Lawyer

   Contributor Level 19

   5

   Lawyers agree

   Answered February 25, 2013 11:40. Generally there is no tax owed on a personal injury settlement. On the off chance there is something unusual about your case, by all means discuss this with a tax advisor. Confidentiality does not apply to such a consultation.

   Any opinions stated in response to Avvo questions are based upon the facts stated in the question. Responses to... moreAny opinions stated in response to Avvo questions are based upon the facts stated in the question. Responses to Avvo questions are for general information purposes only, and should not be construed or relied upon as legal advice. less

   • Mark as helpful
   • Flag
4. 

   John ThygersonPro

   Norwalk Criminal Defense Attorney

   Contributor Level 16

   

   EmailVisit website

   2

   Lawyers agree

   Answered February 25, 2013 13:50. I do not believe that net proceeds to a client recovering monies as part of a personal injury settlement are taxable.

   • Mark as helpful
   • Flag
5. 

   Christian LassenPro

   Philadelphia Personal Injury Lawyer

   Contributor Level 20

   

   Visit website

   2

   Lawyers agree

   Answered February 25, 2013 14:01. Unless there was a lost wage component, pain and suffering money is not taxed.

   Only 29% Contingency Fee! Phone: 215-510-6755 www.InjuryLawyerPhiladelphia.com

   • Mark as helpful
   • Flag
6. Licensed in FL

   

   Scott McPhersonPro

   New Port Richey Personal Injury Lawyer

   Contributor Level 9

   

   EmailVisit website

   Answered March 02, 2013 08:07. First, at least here in Florida, most personal injury settlements are not apportioned between the various types of damages. That normally only happens if the case is tried and the jury completes the verdict form. This is a question for your CPA, and most attorneys (myself included) will have disclaimer language on the closing statement advising client that no tax advice is implied. I think you are concerned because you think the consideration for the confidentiality agreement may be taxable. Again, talk to your CPA.

   • Mark as helpful
   • Flag