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  • Tax question...?

    We received a judgement check from a class action suit I knew nothing about until I got the check. It was something about some subsidiary of our lender having misreported earnings and charging too much interest...gobbledy -gook wording in the explanation...


    ...anyhow, I cannot find in the 1040 instructions how to deal with this...???

    Blessings!

    Jimmy

  • #2
    I'm not a tax accountant, but as best as I can remember, proceeds from lawsuits are similar to insurance payments, non-taxable.

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    • #3
      Tax question...?

      Well, yes they can be.

      https://www.irs.gov/pub/irs-pdf/p4345.pdf

      You should (in theory) receive a 1099 Misc with Box 3 checked.

      And...

      How do I report a settlement from a class action lawsuit in Turbotax?

      Sent from my iPhone using Tapatalk Pro
      Last edited by Trout8myfly; 01-31-18, 09:47 AM.
      "What's his offense?"
      "Groping for trouts in a peculiar river."
      ― William Shakespeare, Measure for Measure

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      • #4
        Yes you should receive a 1099. I got a judgement last year from a class action lawsuit and got a 1099 for it. I liked getting the check but didn't like it as much when tax time rolled around.
        I know where they live, I know what they eat. Now it's time to fool them with thread, feathers and roadkill.


        ------Team Norvise------
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        • #5
          If my memory serves me well, if the amount is a relatively small amount, i.e., a few hundred dollars, the check writer is not required to provide a 1099. You are probably still responsible for reporting it, unless it was the loss of property, etc.,

          You can take that advise and a dollar and get a cup of coffee at McD.
          Want to hear God laugh? Tell Him your plans.

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