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#4
03-07-2005, 07:34 AM
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 Re: Inherited class action settlement? Jim H wrote: - quote - > Daughter has received a cash settlement (about $20K)
Per IRC 691, if it was taxable to the mother, it is taxable> resulting from a class action lawsuit. The twist is that > the award was to Mom. Shortly after the settlement Mom > passed away. The court sent the daughter a check in > daughter's name, along with a 1099. The daughter was never a > party to the suit, and knows almost nothing about its > background. > I'm sure that this settlement would be taxable to Mom, but > is it taxable to the daughter? Their estate is modest. to the daughter. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
03-03-2005, 11:53 PM
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| Re: Inherited class action settlement? Jim H wrote: - quote - > I'm sure that this settlement would be taxable to Mom, but
If it would have been taxable to the mom, then it's "income> is it taxable to the daughter? in respect of a decedent" to the daughter. Line 21 with the notation "IRD." Phoebe  << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
03-03-2005, 11:53 PM
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| Re: Inherited class action settlement? "Jim H" <jnhtx[at]spamcop.net> wrote: - quote - > Daughter has received a cash settlement (about $20K)
The value of the settlement would have been set at> resulting from a class action lawsuit. The twist is that > the award was to Mom. Shortly after the settlement Mom > passed away. The court sent the daughter a check in > daughter's name, along with a 1099. The daughter was never a > party to the suit, and knows almost nothing about its > background. > I'm sure that this settlement would be taxable to Mom, but > is it taxable to the daughter? Their estate is modest. date-of-death value. So the only income to daughter would be interest added to the settlement between the date of death and the date received. -- Tom Healy, CPA Boulder, CO Web: http://www.tomhealycpa.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
03-03-2005, 10:56 PM
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| Re: Inherited class action settlement? Jim H wrote: - quote - > Daughter has received a cash settlement (about $20K)
Income in respect of the decedent? Yep, sounds taxable.> resulting from a class action lawsuit. The twist is that > the award was to Mom. Shortly after the settlement Mom > passed away. The court sent the daughter a check in > daughter's name, along with a 1099. The daughter was never a > party to the suit, and knows almost nothing about its > background. > I'm sure that this settlement would be taxable to Mom, but > is it taxable to the daughter? Their estate is modest. Any estate tax or state inheritence tax attributable to the payment would be deductible. (The settlement -- or, at least, the "present value" of the settlement at the time of death -- should be included in the taxable estate.) << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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03-03-2005, 10:56 PM
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| Re: Inherited class action settlement? Jim H wrote: - quote - > Daughter has received a cash settlement (about $20K)
OOPS -- I almost forgot. The settlement might not be> resulting from a class action lawsuit. The twist is that > the award was to Mom. Shortly after the settlement Mom > passed away. The court sent the daughter a check in > daughter's name, along with a 1099. The daughter was never a > party to the suit, and knows almost nothing about its > background. > I'm sure that this settlement would be taxable to Mom, but > is it taxable to the daughter? Their estate is modest. taxable. I seem to recall a house construction fraud class action suit a few years ago. In that case, the settlement would reduce the basis of the property, or possibly be an installment sale capital gain if you had already sold the property. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
03-03-2005, 07:09 AM
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| Inherited class action settlement? Daughter has received a cash settlement (about $20K) resulting from a class action lawsuit. The twist is that the award was to Mom. Shortly after the settlement Mom passed away. The court sent the daughter a check in daughter's name, along with a 1099. The daughter was never a party to the suit, and knows almost nothing about its background. I'm sure that this settlement would be taxable to Mom, but is it taxable to the daughter? Their estate is modest. Jim << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| action, class, inherited, settlement |
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