Are Personal Injury Settlements Taxable?

Forbes magazine posted an article about an Illinois man who won a $21.5 million dollar verdict after being struck in the head by a door on a Holland America Cruise ship, leaving him prone to vertigo and seizures.  The reason a business magazine chose to report on this is because $16.5 million of the verdict was awarded for punitive damages, meaning the man will have to pay taxes on that money to the Internal Revenue Service.  As Forbes reports, prior to 1996, all types of personal damages were … [Read more...]