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The Complete Idiot's Guide® To Lawsuits by Victoria E. Green

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Is the Win Taxable?

Whether or not a win in court results in taxation is actually a very complicated question. Although the basics are discussed here, it’s extremely important that you consult a qualified tax professional when doing your taxes for the year in which you won a judgment. This is especially true because, depending on the topic of your lawsuit, it might change your tax liability for other years, too.
The first thing to know is that the Internal Revenue Service’s middle name is “Revenue.” As far as the IRS is concerned, any money you get is taxable until proven otherwise. In fact, the most basic rule in the entire field of tax law states that your gross income, which is all the money and benefits you got during the tax year, includes ...

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