property insurance litigation
The tax from the settlement of disputes?
I recently received money from an arbitration agreement. The award was based on a 1998 claim Earthquake insurance that was never solved. In my original court records, he had only requested $ $ to cover damage to rental property I have. In the agreement, the insurance company does not admit guilt. I've already spent $ $ in the years prior to the repair of my property. The reward they received to cover expenditure already incurred and provides additional funds for possible future improvements to rental property that may or may not incur. What portion of the reward should I pay taxes on? Just a matter of compensation against punititive? I have to pay taxes and non-compensatory punitiive?
To my knowledge, this kinds of things usually are not taxable. However, if you declared a loss not repaid on your tax deductions and paid out of pocket for the repairsyou might have to return to its state before the tax returns. Recommend you contact a CPA to make sure it is properly presented and you presented correctly in the past.
