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Submitted By: someone
Answered: June 1, 2022 2:45 am
Answered: June 1, 2022 2:45 am
I received a wrongful death settlement following the death of my relative. Is this taxable to me or to her estate?
A wrongful death settlement of compensatory damages is nontaxable because it is the result of a claim arising from personal physical injury or illness. However, if the settlement includes punitive damages and/or interest, that portion of the settlement is taxable.
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Tax Glossary
Individual retirement account (IRA)
A retirement account to which up to $4,000 (or $5,000 if you are 50 or over) may be contributed for 2007, but deductions for the contribution are restricted if you are covered by a company retirement plan. Earnings accumulate tax free.
