Tax question...?

[Counslrman]

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

[mb90535im]

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

[Trout8myfly]

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

[Prowler]

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.

[UncleJesse]

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.