Taxes on Wrongful Death Settlement

Asked over 1 year ago - Los Angeles, CA

Once you are getting settlements on a wrongful death settlement do you have to pay taxes. I have heard several different things on this issue. The settle ment would come from a state which I do not live in.

Attorney answers (3)

  1. Adrienne Patricia Allen

    Contributor Level 15


    Lawyers agree

    Answered . You may wish to consult with a tax professional. In personal injury the portion of the settlement that replaces wage or income losses are taxable but the rest is not (i.e. medical bills, out of pocket expenses and pain and suffering. )

    I am licensed in California only and my answers on Avvo assume California law. The above answer is for general... more
  2. Matthew Erik Johnson

    Contributor Level 17


    Lawyers agree

    Answered . I would suggest a CPA over a tax attorney. Most damage are not taxed. However, certain exceptions, most notably punitive damages, are exceptions. While the estate will be taxed (if any), the heirs will not be taxed directly unless they take distributions before reporting any required amount to the IRS and California Department of Revenue.

    Matthew Johnson phone# 206.747.0313 is licensed in the State of Washington and performs bankruptcy, short sale... more
  3. Evan Matthew Oshan

    Contributor Level 11


    Lawyers agree

    Answered . You should consult with a tax attorney in your area. Try the AVVO attorney search.

    Communication through AVVO does not constitute legal representation. Representation by this law firm can only be... more

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