0
How do you avoid paying taxes after winning a large sum of money from a lawsuit?
Wiki User
∙ 15y ago
What the payment is for will determine its taxability. For example, a payment you receive replacing something you lost, such as a car, your home, jewelry, etc., is generally not taxed. Awards and settlements related to personal injury are not taxed. Also, frequently, many of the costs of the lawsuit may be taken against the result and that can substantially change the tax result. (For example, if the attorney is paid a percentage fee or an hourly fee, and who pays for other expenses, are all directly related to who gets the income and or the right to deduct it). These deductions are miscellaneous itemized on Schedule A, and are reduced by 2% of adjusted gross income. Court awards and settlements for breach of contract, most torts, including punitive damages, are generally taxable with the exception of those relating to personal injury.
You should work with a qualified attorney and tax professional to make sure your settlement is structured to minimize any tax liability. If you have already received an award or settlement, then you should consult a good tax professional to advise you. And of course, tax is paid on your entire financial dealings, not just on this one item. So, depending on many other factors, like losses from other sources, charitable contributions, number of dependents and other deductions, you may not end up paying tax anyway.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
How does duty and smuggling related?
Smuggling in large quantities is often an effort to avoid paying import duties.
What does the term 'class action' refer to in a lawsuit?
A class action lawsuit settlement is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a group of defendants is being sued. It originated in the United States.
How do you fight a large pharmaceutical company without a lawsuit?
A brick
What do you do to avoid paying taxes on a large sum of money?
the answer to that question would be: Don't its illegal, with a sentence of up to something like 20 years in prison if found guilty.
What happen if you break the copy right law?
A lawsuit, large fine or imprisonment.
What was John Hancock's job before the war?
Hancock was a merchant shipper of goods; however, he became wealthy and an important man from all the smuggling of goods that he did. (To avoid paying the very large taxes demanded by the King.)
You sold an investment property and now am facing large capital gains taxes if you place the proceeds into a Charitable Remainder Trust can you avoid paying them?
No. The tax is on the gain from that done transaction. What you do with your net proceeds won't effect it.
What is a sentence using the word settlement?
They were expecting a large settlement from the lawsuit. The settlement in New England is quaint.
What does he won by a landslide mean?
Just watch Landslide Sarah Palin. http://www.landslidesarah.com Landslide is hyperbole for winning by a large margin. Different people define "large" differently and it can mean anything from winning all the votes down to winning by a few percentage points.
How can you avoid disorders of the large intestine?
3 miles
Where do Muslims make a pilgramage each year?
Yes but a large organisation will be well prepared for a lawsuit and you will only win if it was their direct fault.
What are some hand gestures used in Iceland?
Avoid brisk and large gestures, and speak calmly!there are the gestures in iceland. Avoid brisk and large gestures, and speak calmly!there are the gestures in iceland.
