iceman wrote:

- quote -

First impression is that it is the estate what pays the
income taxes. So contact the executor (personal
representative) and dig deeper into this question.

ChEAr$,
Harlan Lunsford, EA n LA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

My natural father passed from Asbestosis. He named me as
1/8th heir to his estate, which had nothing except an
Asbestos claim. Five years later, the Personal Rep. of the
estate says that I will be receiving a distribution of quite
a sum before the end of the year. He wants to know if I
want it in all one lump sum or spread out?

The award comes from punitive damages and will be paid
directly to the heirs of the estate. IRS Pub 525 says that
punitive awards are taxable.

A person at the IRS told me it doesn't matter when I take
the award. Taxes are due in the year that the award is made
from the courts. I'm also told I cannot average out the
award over several years to reduce the tax consequences.

What would be my best course of action to reduce the tax
consequence of receiving this award?

Thank you in advance.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >