Our tax laws acknowledge that a return of capital doesn’t trigger income tax. The fundamental concept is that when property is taken away from a taxpayer and then returned to them, it doesn’t result in an increase in their net worth. Rather, their net worth is restored to where it was before, and since there……
Tag: Lawsuit Awards
IRS Guidance on Structuring Attorneys Fees
It should not be a surprise to learn that attorneys often hire tax attorneys to help them minimize their taxes. One popular tax savings strategy for attorneys is to structure their contingent fees. A contingent fee is a payment arrangement in which a lawyer provides services on the condition that payment will only be made……
Tax on Damages for Loss of Consortium
Those who receive damages from physical injuries or sickness are not required to pay tax on the damage award or settlement. That is the general rule. But what about ancillary claims by others? What about a lawsuit for physical damage that also includes a claim for the injured parties spouse? What if the taxpayer-husband was injured and the……