"Tim" <Tim5464[at]yahoo.com> wrote:
- quote -

I hope you're kidding. Again, same question -- why are
you worried about what "he can deduct"? If I were you,
I wouldn't give a rat's arse. Worry about what's going to
be taxable on your side when you receive the settlement
check.

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<bbs[at]mechanicsofmoney.com> wrote:
- quote -

No, like I said (this time correctly ) wages, interest,
legal fees.

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Tim wrote:
- quote -

The answer will also depend on what the settlement is for.
If it is for a personal injury claim, some or all of the
settlement may not be deductibe. This might help:
http://www.irstaxtrouble.com/2005/08...greements.html

Gary
http://www.mechanicsofmoney.com
http://www.mechanicsofmoney.com/blog.php

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Tim wrote:
- quote -

The answer will also depend on what the settlement is for.
If it is for a personal injury claim, some or all of the
settlement may not be deductibe. This might help:
http://www.irstaxtrouble.com/2005/08...greements.html

Gary
http://www.mechanicsofmoney.com
http://www.mechanicsofmoney.com/blog.php


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"Tim" <Tim5464[at]yahoo.com> wrote:

- quote -

Did you mean employER? Did he work for you, or did you work
for him?

Bob Sandler

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"Tim" <Tim5464[at]yahoo.com> wrote

- quote -

He gets to deduct all of the settlement.

Had any of it be a penalty or fine, generally assessed by a
governmental agency, he would not have been able to deduct
the fine or penalty.

--
Paul A. Thomas, CPA
Athens, Georgia

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"Sgt.Sausage" <nobody[at]nowhere.com> wrote:
- quote -

Oops! "A former employee" should have read "A former
employer". That changes everything doesn't it.

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"Tim" <Tim5464[at]yahoo.com> wrote:

- quote -

Does "he" ==> the former employee?

Why on earth would you be interested in what *he* can
deduct? It's of no concern to you.

How can "he" deduct from his "corporate income tax" wages?
If he's a "former employee", aren't *you* the one who paid
the wages that he's now returning as part of the settlement?

Worry about what part of that is taxable to *you* and let
him deal with his problems.

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A former employee has offered to pay me $200,000 as a settlement to a
lawsuit.
It represents $100,000 in wages, $50,000 in interest, and $50,000 in legal
fees.

Obviously he can deduct the wages from his corporate income tax, but how
about the interest and legal fees?

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