Structured Settlements 4Real®Blog 2026
Structured settlements expert John Darer reviews the latest structured settlements and settlement planning information and news, and provides expert opinion and highly regarded commentary. that is spicy, Informative, irreverent and effective for over 20 years.
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Category: Taxes and Structured Settlements
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The IRS has consistently held that compensatory damages, including lost wages, received on account of a personal physical injury are excludable from gross income with the exception of punitive damages. Rev. Rul. 85-97 and also see Commissioner v. Schleier, 515 U.S. 323, 329-30 (1995). says IRS.
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Higher taxes make structured settlement tax advantages inherently more valuable. Paul Tudor Jones II, the billionaire hedge fund manager is quoted ‘There’s plenty of room to raise taxes’: Jones says the US will need to change Social Security, cut federal health insurance to deal with a worsening debt crisis — are you ready?
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Attorney Fee Deferred Compensation | Structured Attorney Fee Alternative for Trial Lawyers.Guide to Personal Injury Attorney Fee Tax Deferral Plans. An Overview for Year End Tax Planning
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When structuring attorney fees or taxable damages, it’s common to schedule the first payment in January of the following year so that it is not received in the same tax year as the settlement. An attorney who is already having a great income year can use this strategy to delay receipt
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Can retired New York State lawyers who have structured attorney fees take an exclusion, on that income, of up to $20,000 intended for retirees on their structured attorney fee income?
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Sellers need to be aware that a transactions that do not comply with federal or state statutes, may put the tax treatment on the table for discussion. The Federal legislation, effective in 2002, that established IRC 5891, is intended to protect payees who sell structured settlement payments.
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Compensation for pain and suffering resulting from the consensual performance of a service contract is not “damages” under I.R.C. section 104(a)(2) and must be included in gross income
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Generally a portion of the income received from structured settlement payment rights is taxable if acquired in the secondary market by an investor. Ways to mitigate the immediate impact exist.
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Structured settlement payments can be tax-free for payees if they relate to qualified damages under specific sections of the Internal Revenue Code, such as physical injury or workers compensation. Non-qualified settlements offer tax deferral, usually taxed upon receipt. Consulting a structured settlement advisor is recommended for proper establishment.
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With respect to structured settlements for personal injury, payable to Australian nationals, the Australian tax exemption is limited to circumstances where an annuity is purchased from an Australian insurer registered under the Life Insurance Company Act of 1995, or a State Insurer