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Is construction defect litigation settlement taxable?

San Francisco, CA |

HOA board settled construction defect litigation and will be using the settlement to fix the defect. Is the settlement $ taxable? If so, at what ~rate?

Attorney Answers 3


  1. Generally speaking, no. Lawsuit settlements that are to replace or repair damaged items not considered taxable income. Always consult with a tax professional if you have specific concerns.

    Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This Avvo.com posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.


  2. You should consult a tax professional but generally speaking the money is to repair defects and not an income.

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