I have a plot of vacant land that was falsely sold as a result of identity theft. The title company is going to offer a cash settlement. At what rate will the cash I receive be taxed? Does it count as earned income? I had no intention of selling the property, in the first place, now I’m afraid of being taxed on the settlement. The property I owned was a gift from my parents for which I paid nothing.
Thanks.
I sell Life, Health, Accident, Disability, Long Term Care, Medicare and Fixed Annuties Insurance. I have my own agency and am the only sales person in my agency. I have E & O Insurance through two MGA’s, but would like to have E & O Insurance so I can write with other agencies if necessary. I have never had a claim. I would like a quote on Aggregate $1,000,000., Each Claim $1,000,000., Deductible $2500.00.
I am single, 53 year old, retired because of a disability at the VA. I have back surgury. I currently pay $60.00 a month in withholdings.
I was told I will get all this back when I file my taxes for 2009.
I live in Tennessee and there is no state income tax. I looking to understand my liability to the fed tax?
I recently received money from an arbitration settlement. The reward was based on a 1998 Earthquake insurance claim that was never resolved. In my original court filings, I had only asked for $$ to cover damages to the rental property I own. In the settlement, the Insurance company did not admit to fault. I have already spent $$ over the preceding years to repair my property. The reward I received covers the expense I have already incurred and provides for additional funds for possible future improvements to the rental property that I may, or may not incur. What portion of the reward do I have to pay taxes on? Does it only matter it is compensatory vs. punititive? I have to pay taxes on punitiive and not compensatory?
Thank you for your prompt responses. I should have added more details so you’ll know what I mean. I was rear-ended on the freeway in Chicago last Spring ‘08. The driver of the other car immediately assumed responsiblity and his (out of state) insurance company issued a check for $3,500 to be released of futher involvement (it was very minor; only bumper damage). On the stub attached to the check the description only reads “Bodily Injury Payment-Auto”…….I was up late completing my taxes and remembered this incident and didn;t want it to haunt me later. I searched the web fir answers (even the IRS) and the answer are the same as yours (basically)………..thanks.