Legal Question in Personal Injury in California

The general rule is that compensation for lost income is taxable as had that income been earned it would be taxed. Other compensation is not taxable. If you settle the case, your attorney can try to structure the settlement that most of the money received is not attributed to lost income.

Mr. Shers is correct, but don't get to aggressive with it, or it may come under IRS scrutiny. Almost all wrongful death plaintiffs are suing in large part for lost future income of the decedent. So be careful.