"malibu.ron[at]verizon.net" <malibu.ron[at]verizon.net> wrote:

- quote -

I'm not aware of any legal cases to support your original
assertion. That said, the only other exclusion would be for
medical expenses.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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malibu.ron[at]verizon.net wrote:

- quote -

I would highly recommend that you get a California lawyer
involved who has some experience in the taxation of
settlements. This area of tax law is a legal minefield, and
incorrectly documenting the settlement or incorrectly
reporting the payments to the IRS can result in some very
large and very unexpected adverse tax consequences.

--Chris Ballard

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >

I am negotiating settlement of a medical malpractice suit.
California state law limits the plaintiff to claim a maximum
$250,000 for "pain and suffering" from the insurer. The
insurer can be held responsible to pay plaintiff for other
reasons.

1. reduced loss of enjoyment of life
2. medical expenses
3. loss of income

I believe the $250,000 award for pain and suffering to be
federally tax exempt but I wish to know if any of the 3
other categories are also tax exempt.

Thank you,

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >