Tax planning in litigation — How to ensure optimal tax treatment

Description

Abstract: For those who are a party to a lawsuit or other legal proceeding, the taxability or deductibility of damages can have a big impact on the financial outcome. But, as this article explains, a little tax planning can help ensure the desired tax treatment. Much depends on the nature of the underlying claim: that is, whether compensatory damages are received as a result of personal physical injuries or physical sickness, injury to property, or illegal discrimination.