Robert W. Wood is a tax lawyer (www.WoodLLP.com) who handles tax disputes, writes tax opinions, advises on crypto, disclosures and more. He is best known for advising plaintiffs on the tax treatment of lawsuit settlements and legal fees, serves as an expert witness, and writes widely for tax publications on these and other tax topics. You can reach him or his archive of tax articles at Wood@WoodLLP.com.
Damages For Sickness Are Tax Free, But Emotional Distress Is Taxed
Damages for physical injuries are tax free under Section 104 of the tax code. Yet what is "physical" is tricky, and damages for emotional distress are taxable.
Tax-Free Qualified Small Business Stock Break Jumps From $10M To $15M
The recently passed tax law increased the tax-free exclusion for qualified small business stock from $10 million to $15 million, and the law made other changes too.
Sky-High 14.4% California Taxes Often Trigger Out-Of-State Moves
Some Californians flee the state before selling real estate or a business. If done with adequate time, settling a lawsuit or selling stock after a move can make sense.
How Plaintiffs Can Write Off Their Legal Fees Under Big New Tax Law
No plaintiff should pay taxes on legal fees paid to their lawyer. The legal fees may be gross income, but there is usually a way to deduct them on your taxes.
How Californiaโs Tax Collector Collects From Out-Of-State Businesses
California can tax you if you have California customers who receive the benefit of your services in California, even if you operate entirely from anther state.