IRS News
Does IRS Tax Legal Malpractice Settlements?
Legal malpractice claims arise out of accident and medical malpractice cases, wills and trusts, divorce, litigation, tax advice, real estate deals, and many other types of legal matters.
Whatever the circumstance, when a legal malpractice case settles, there are bound to be tax issues. Is the recovery taxable, and if so, as ordinary income, capital gain, basis recovery, or some combination of those?
There seem to be no shortage of legal malpractice cases and recoveries, but there is little authority how they are taxed. Convincing the IRS and the courts not to tax payments can be difficult.
Here are a few examples of malpractice recoveries with comments how they might be taxed.
forbes.com
News
Employee Retention Credit Under COVID-19 Relief
The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 is a $900 billion relief package to deliver a second round of economic stimulus for individuals, families, and businesses. This legislation provides relief through multiple measures and expands many of the provisions already put into place under the CARES Act.
accountingweb.com
How Your Small Business Clients Should Prepare for Tax Season 2021
Your small business clients can do these three things to prepare for an efficient tax season and a better financial year.
getcanopy.com