104 exclusion


Emotional Distress or Physical Sickness Resulting in Emotional Distress

In Tishkoff v. Commissioner, T.C. Summary Opinion 2016-65, the court considered whether a lawsuit settlement payment was subject to income tax. The question was whether the payment to the taxpayer was for her for emotional distress or for personal physical sickness that resulted in emotional distress. One is taxable, the other is not. The taxpayer […]

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Inference of Physical Sickness or Injury Not Sufficient to Exclude Settlement Payment

Settlement payments paid to compensate a taxpayer for his physical sickness or injury are not taxable. This rule has been heavily litigated. It often comes down to what proof there is of the physical sickness or injury. In Abraham v. Commissioner, T.C….


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