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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
Capital gain or loss
The difference between amount realized and adjusted basis on the sale or exchange of capital assets. Long-term capital gains are taxed favorably. Capital losses are deducted first against capital gains, and then again up to $3,000 of other income.
