Insurance payment: pain & suffering

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Subject Author Date Insurance payment: pain & suffering Vic Dura 10-01-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-01-2009  Re: Insurance payment: pain & suffering Arthur Kamlet 10-01-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-01-2009  Re: Insurance payment: pain & suffering Vic Dura 10-01-2009  Re: Insurance payment: pain & suffering D. Stussy 10-01-2009  Re: Insurance payment: pain & suffering Bill Brown 10-01-2009  Re: Insurance payment: pain & suffering Vic Dura 10-01-2009  Re: Insurance payment: pain & suffering Arthur Kamlet 10-01-2009  Re: Insurance payment: pain & suffering D. Stussy 10-01-2009  Re: Insurance payment: pain & suffering Alan 10-01-2009  Re: Insurance payment: pain & suffering removeps-groups@yahoo.com 10-01-2009  Re: Insurance payment: pain & suffering Alan 10-02-2009  Re: Insurance payment: pain & suffering Bill Brown 10-02-2009  Re: Insurance payment: pain & suffering removeps-groups@yahoo.com 10-02-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-02-2009  Re: Insurance payment: pain & suffering Bill Brown 10-02-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-02-2009  Re: Insurance payment: pain & suffering Bill Brown 10-02-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-02-2009  Re: Insurance payment: pain & suffering Alan 10-02-2009  Re: Insurance payment: pain & suffering removeps-groups@yahoo.com 10-02-2009  Re: Insurance payment: pain & suffering Alan 10-02-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-02-2009  Re: Insurance payment: pain & suffering Arthur Kamlet 10-02-2009  Re: Insurance payment: pain & suffering Alan 10-02-2009  Re: Insurance payment: pain & suffering Arthur Kamlet 10-02-2009  Re: Insurance payment: pain & suffering Alan 10-02-2009  Re: Insurance payment: pain & suffering Bill Brown 10-02-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-02-2009  Re: Insurance payment: pain & suffering Seth 10-02-2009  Re: Insurance payment: pain & suffering Arthur Kamlet 10-02-2009  Re: Insurance payment: pain & suffering Seth 10-02-2009  Re: Insurance payment: pain & suffering Arthur Kamlet 10-03-2009  Re: Insurance payment: pain & suffering Vic Dura 10-03-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-03-2009  Re: Insurance payment: pain & suffering Bill Brown 10-03-2009  Re: Insurance payment: pain & suffering Bill Brown 10-03-2009  Re: Insurance payment: pain & suffering Alan 10-04-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-05-2009  Re: Insurance payment: pain & suffering removeps-groups@yahoo.com 10-04-2009  Re: Insurance payment: pain & suffering Bill Brown 10-05-2009  Re: Insurance payment: pain & suffering Alan 10-05-2009  Re: Insurance payment: pain & suffering removeps-groups@yahoo.com 10-05-2009  Re: Insurance payment: pain & suffering Alan 10-05-2009  Re: Insurance payment: pain & suffering Alan 10-05-2009  Re: Insurance payment: pain & suffering Bill Brown 10-06-2009  Re: Insurance payment: pain & suffering removeps-groups@yahoo.com 10-06-2009  Re: Insurance payment: pain & suffering Alan 10-06-2009  Re: Insurance payment: pain & suffering Stuart A. Bronstein 10-03-2009  Re: Insurance payment: pain & suffering Vic Dura 10-08-2009
Posted by Stuart A. Bronstein on October 2, 2009, 7:43 pm Please log in for more thread options >> removeps-gro...@yahoo.com wrote: > >> > Are you talking about section 101? >> >> No. I am talking about section 104(a)(2) and 104(a)(3) and its >> revenue rulings. > > Section 104 only covers payments made to the son? That would be my interpretation. I did some looking around and found no court cases dealing with the issue. If you take the statute literally, Alan seems right. The statute says in relevant part that the following is not included in taxable income: "the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness;..." If I were with the IRS I'd take the position that to be excluded, the personal injuries that caused the emotional distress have to be for the same person. Otherwise the exceptions might swallow the rule. However the statute doesn't say that. I don't know the IRS position. And it might well be reasonable to excluded those damages from income unless there is more certain authority that would disallow it. -- Stu http://downtoearthlawyer.com -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Bill Brown on October 2, 2009, 9:39 am Please log in for more thread options > wrote Re Re: Insurance payment: pain & suffering: > > >> Hello, > > >> If I were to receive a payment from an someone's liability insurance > >> company for "pain & suffering", would that be taxable on my form 1040? > >> If so, does it go in line 21? > > > My son was killed in a boating accident in June. The liability > insurance company for the boat/owner wants to make a settlement to my > wife and I for "pain & suffering"; although we are only interested in > being reimbursed for out-of-pocket medical and funeral expenses. I > need to have an idea how that would be handled tax wise. Vic, My condolences on your loss. It must be a terrible time for you and your wife. I disagree with Kamlet and Stussy. The payments are being made because of physical injury. There is nothing in the code that requires such excludible payments be made to the person who was injured. Regards, Bill -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Stuart A. Bronstein on October 2, 2009, 10:26 am Please log in for more thread options >> >> My son was killed in a boating accident in June. The liability >> insurance company for the boat/owner wants to make a settlement >> to my wife and I for "pain & suffering"; although we are only >> interested in being reimbursed for out-of-pocket medical and >> funeral expenses. I need to have an idea how that would be >> handled tax wise. Vic - I'm so sorry for your loss. It must be really horrible. > I disagree with Kamlet and Stussy. The payments are being made > because of physical injury. There is nothing in the code that > requires such excludible payments be made to the person who was > injured. I suppose it depends on whether the pain and suffering damages are for those of the son or those of the parents. If for the son then I agree with you. That would seem to come within §401's exemption for payments "on account of personal physical injuries or physical sickness;..." However if it's for the parents' pain and suffering, seems to me it would come under the statute's mandate that "emotional distress shall not be treated as a physical injury or physical sickness." -- Stu http://downtoearthlawyer.com -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Bill Brown on October 2, 2009, 12:43 pm Please log in for more thread options wrote: > I suppose it depends on whether the pain and suffering damages are > for those of the son or those of the parents. > Actually, it does not. The parents suffered emotional pain and distress because of a physical injury which resulted in the death of their son. Therefore the payments to them are excludible. In Kevin M. O’Gilvie and Stephanie L. O’Gilvie, minors, Petitioners v. United States [96-2 USTC ¶50,664; 117 SCt 452] the Supremes make clear that the only reason settlement payments received by a decedent's minor children were not excludible is the payments were punitive damages. If the payments to the children had not been punitive damages, then those payments would have been excluded from taxation. The same reasoning applies to the OP's situation. The payments are excludible. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Stuart A. Bronstein on October 2, 2009, 1:18 pm Please log in for more thread options > "Stuart A. Bronstein" wrote: > >> I suppose it depends on whether the pain and suffering damages >> are for those of the son or those of the parents. > > Actually, it does not. The parents suffered emotional pain and > distress because of a physical injury which resulted in the > death of their son. Therefore the payments to them are > excludible. I believe it has to be for your own personal injuries, not someone else's. > In Kevin M. O’Gilvie and Stephanie L. O’Gilvie, minors, > Petitioners v. United States [96-2 USTC ¶50,664; 117 SCt 452] > the Supremes make clear that the only reason settlement payments > received by a decedent's minor children were not excludible is > the payments were punitive damages. If the payments to the > children had not been punitive damages, then those payments > would have been excluded from taxation. The same reasoning > applies to the OP's situation. The payments are excludible. That case is inapplicable. First of all this specific issue was never brought up in that case. But more important, that case dealt with §104 as it read in 1988. And then it excluded all damages resulting from personal injuries, including emotional distress. So under the code as it read at that time, the damages were excludible from income even if they were for emotional distress. -- Stu http://downtoearthlawyer.com -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted payment for insurance policy renewals on 1099-MISC April 2, 2009, 12:51 pm does payment of health insurance premium by company = employee compensation November 10, 2006, 2:02 am Pain - Doctors - Medicine and Health - Prescription Drugs June 19, 2007, 9:30 pm Arizona - form 309 taxes pain to another state or country ? 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