Legal Question in Tax Law in California

Reporting judgmenrt as income to IRS

As Cross-Complainant against Cross-Defendant was awarded 139K as compensation for & replacement cost of property stolen by C-D, 45K attorney fees, 100K for emotional distress damages; and 300K punitive.

My Question is: of 70K recovered, 20K I owe lawyer as balance to collect. Lawyer says I must provide him W-9 & 1099 on remaining 50K. I am disabled, receive SSI and on Medi-Cal. Can I avoid this? Concerned about losing benefits from state. Is compensation for replacement of stolen property and or attorney fees exempt? What about emotional distress & punitive? If I can't avoid, then can I request a special needs trust be created with the 50K? Lawyer excepted disbursement from court into his account, is it too late to go back and request order for a SN-Trust? As post note: 70k disbursement was via probate court.


Asked on 7/24/06, 6:00 pm

1 Answer from Attorneys
Donald Field Donald L. Field, Jr., Attorney at Law

Re: Reporting judgmenrt as income to IRS

these questions cannot be answered correctly and completely without additional facts and a review of all related documents. in this situation if your attorney is not qualified to provide you with tax/medical/ss advice, it is best to retain a qualified tax attorney or cpa before the settlement/judgment is finalized and funds are disbursed.

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Answered on 8/08/06, 12:27 pm


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