Are personal injury settlements paid out of pocket deductible?
September 13, 2006
Date: Sun, 09 Apr 2006
Are personal injury settlements paid out of pocket deductible? You have discussed the taxability of the award, but not the deductibility.
Date: 02 Jun 2006
It depends. You will need to see a tax advisor about your facts.
When the injury relates to a business, such as from a product liability lawsuit or an accident on a hotel property, the expense is usually deductible as a business deduction.
When the injury is personally inflicted, such as a civil suit for assault, the payment is not deductible.
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