$24.95 
Learn more
Submitted By: Jack
Answered: May 13, 2014 8:30 am
Answered: May 13, 2014 8:30 am
I received a legal settlement from an insurance company as a result of my sister’s death in a car accident (I’m her next of kin). Is this taxable to me?
Sorry about your personal loss. The settlement is tax free to you because it is compensation for personal physical injury. However, if any part of the settlement is for punitive damages, those are taxable.
advertisement
Featured Books
Tax Glossary
Tax deferral
Shifting income to a later year, such as where you defer taxable interest to the following year by purchasing a T-bill or savings certificate maturing after the end of the current year. Investments in qualified retirement plans provide tax deferral.
