The settlement proceeds are not taxable for income tax purposes.
Whether you should invest in real estate is an investment decision, not a legal one.
If you do decide to invest in real estate, you should retain an attorney to represent you,
I agree with the prior answer but will add that to the extent that you deducted medical expenses on your income tax return that relate to the case you are settling, then the recoupment of that money is taxable. Your investment is a personal decision
Hope this helps. If you think this post was helpful, please check the answer was a good answer tab below. Thanks. Mr. Geffen is licensed to practice law throughout the state of Texas with an office in Dallas. He is authorized to handle IRS matters throughout the United States and is licensed to practice in US Tax Court as well as The Court of Claims. This answer is provided as a public service and as a general response to a general question, it is not meant, and should not be relied upon as specific legal advice, nor does it create an attorney-client relationship.
the settlement is not taxable because it is the result of a personal injury. The money used to purchase real estate will not be taxed. If you rent the the real estate, you will pay tax on the rental income....when you sell the property, you will be taxed on the profit - revenue that exceeds the adjusted basis in the property.
You may look into holding the real estate in a business entity - LLC or corp
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