Legal Question in Medical Malpractice in Pennsylvania
If we receive a settlement from a lawsuit, what are the tax consequences both federal and state(PA)?
Do we pay on entire settlement even though lawyers take 40% plus expenses?
Asked on 7/24/10, 12:09 pm
1 Answer from Attorneys
Arthur Newmark
Arthur Newmark, M.D.. Esq
Unfortunately, the U.S. Supreme Court has ruled that the gross settlement, to the extent that it is taxable, is reportable as income, though the legal fees can be itemized deductions. This becomes a major issue in he context of Alternate Minimum Tax.
You should seek the advice of a tax lawyer and/or a tax accountant.
Answered on 7/25/10, 4:36 pm
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