The Individual Plaintiff Tax Trap — A Conundrum and a Solution
Settling Easier With Qualified Settlement FundsThe Individual Plaintiff Tax Trap — A Conundrum and a Solution
Publisher: Tax Notes Federal
Author:
Lawrence J. Eisenberg, Lawrence J. Eisenberg PC
Plaintiffs and defendants regularly negotiate a settlement “number,” leaving most “everything else” to be figured out later. Once negotiated, defendants want to finalize quickly, while plaintiffs need time to address taxes, investment strategies, liens, and other issues that impact defendants far less. Qualified Settlement Funds (QSFs) allow both sides to meet their goals. This article for the American Bar Association discusses how.
In this article, Eisenberg examines the disparate tax treatment of various plaintiff recoveries and the deductibility of attorney fees, and he offers a trust-based solution for individuals caught in a costly tax trap.
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