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2 hours
CTEC IRS NASBA

Taxation of Lawsuits, Awards, and Settlements

Course Objectives:

This course describes the various tax consequences that arise when the taxpayer receives or pays a lawsuit judgment, award, or settlement. Both gross income inclusion rules and tax deduction issues are discussed and illustrated with examples from case law and IRS rulings. The payment of attorney's fees is also covered extensively. After taking this course you should be able to accurately assess the tax ramifications of damages and settlements received or paid by your clients and assist your client and counsel representing your client in structuring lawsuits and settlement agreements.

Learning Objectives:

Upon completion of this course you will be able to:

  • Identify damage awards and settlements that are taxable
  • Recognize which legal expenses are deductible
  • Choose appropriate approaches to settling legal disputes to achieve favorable tax consequences
  • Describe how to report attorney's fees with respect to legal disputes
  • Indentify the tax consequences of divorce, contract, and other types of legal cases

Field of Study: Tax
Course Level: Basic
Prerequisite: None
Delivery Method: QAS / Self Study
Expiration: In accordance with NASBA standards, access to this course will terminate one year from the date of purchase. Incomplete courses will no longer be accessible beyond the one year deadline.

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