Which taxable damages cases are eligible for non-qualified structured settlements?
Employment lawsuit settlements
- Wrongful termination
- Constructive dismissal
- Failure to Promote
- Sexual Harassment
- Discrimination lawsuits for Age, Gender, Sexual Preference or Disability related discrimination
- Make up Pension Differential
Structured installment sale(structured sales) of a highly appreciated real estate or business interest with large capital gains exposure
- Must qualify as an installment sale under Internal Revenue Code IRC§453.
Intellectual Property lawsuit settlements
Long Term Disability Claim Settlementsfor employer paid self-insured or insured disability claims, a solution is available that deals with the employers tax reporting requirements when using this solution. Ask for details.
Breach of contract
Wrongful Imprisonment settlements Note that damages wrongful imprisonment/wrongful conviction are income tax free pursuant to IRC 139F. Because IRC 130 only includes damages excluded under IRC 104(a)(1) workers compensation and IRC 104(a)(2) personal physical injury, physical sickness & wrongful death, structured settlements where the defendant or insurer wants a novation of the future obligation, must be established using a non qualified assignment.
Defer the taxes on taxable damages in NYC, NY, CT, NJ, AL, AK, AZ, CA, CO, DE, FL, GA, IL, IN, KY, KS, LA, MA, MD, ME, MA, MI, MN, MO, MS, NB, NH, NM, NC, NV, OH, OR, PA, RI, SC, SD, TN, TX, VA, VT, WA, WI, and the District of Columbia (Washington DC)
Are emotional distress damages taxable income or tax exempt income?
The emotional distress is due to a personal injury that is not due to a physical injury or sickness (for example, unlawful discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders. {Source: IRS Audit Technique Guide]
By using a non qualified structured settlement, the payee can defer emotional distress damages, and the applicable income tax, to the dates that payments are received in the future
taxable Settlement CONSULTING