Structured Settlement Tax Information

Structured Settlement Tax

Section 104(a)(2) of the federal Internal Revenue Code, damages paid "on account of" a physical injury or wrongful death are excluded from an individual's income tax. However, for those who strive off this settlement. The investment income earned from a lump sum settlement may be fully taxed.

 Under a structured settlement, all future payments are completely free from:

• Federal & state income taxes,
• Taxes on interest, dividends and capital gains, and
• The Alternative Minimum Tax (AMT).

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