Helen asks…does the internal revenue service tax a settlement created by a personal injury suit?if i won two million dollars in a personal injury suit. will the internal revenue service tax that moneyadmin answers:Settlements for physical injury or illness are not taxable. However if any part is earmarked for lost wages, interest, or punitive damages those portions are fully taxable as ordinary income.
Some attorneys are not aware of the tax implications on settlements. If it's a
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