Tax Law Updates | New Statutes, Regulations, and Rulings
June 9, 2010
IRS: Money Recovered from Wrongful Death Action Resolved by Legislative Settlement Is Excludible from Gross Income
Private Letter Ruling LTR 201022009
LTR 201022009, 2/24/2010
In a Private letter Ruling, the Internal Revenue Service (“IRS,” or “Service”) has determined that the amount received from a wrongful death action resolved by legislative settlement is not includible in the gross income under section 104(a)(2), except for any amounts attributable to medical expenses that were in fact deducted on a previous year’s federal income tax return.
By way of background, B, related to C who is the Taxpayer in this case, was one of W individuals killed in Incident. In Year 1, the estates of those killed and their survivors (including Taxpayer) entered into a joint prosecution agreement (“JPA”)…
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