Legal Question in Tax Law in California

Re: Taxes on non-punitive damages.

Whoa! That's a loaded question. The answer has to do with what the settlement was for, which is usually governed by the claims made in the lawsuit. Who was the suit against? How much was your settlement for? How were your damages calculated?

Was it an employment-related case? Was it compensatory tort damages? If you write me more, I'll steer you to the answer. Be thorough in describing your suit, the damages you claimed (and how that was broken up or calculated), and the terms of the settlement agreement.

You can e-mail me at [email protected]. I'd be happier if you consulted a local tax attorney since there are issues of state law which occasionally get involved and I don't know CA's laws. Is your spouse involved? Are you both U.S. citizens?