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alternative housing, moving, storage or packing costs, temporary
housing costs, any costs of commuting to and from work in excess
of those that would have been incurred commuting to and from the
denied housing; and (6) whether the claimant provided evidence of
any other compensable loss.
Petitioner received $175,000 of the $350,000 awarded to him,
his wife’s estate, and his children. Petitioner engaged an
experienced tax attorney who met with the class action attorneys
to obtain all the pertinent facts and circumstances. After
reviewing the information, the tax attorney advised petitioner to
report $12,500 of the $175,000 as “other income” and to label it
“damages” on petitioner’s 2002 Form 1040, U.S. Individual Income
Tax Return. Petitioner took his tax attorney’s advice and
reported on his 2002 return $12,500 of the $175,000 in damages he
received.
In the notice of deficiency, respondent determined that the
entire amount of the settlement was includable in petitioner’s
gross income. Additionally, respondent determined an accuracy-
related penalty of $9,956 related to petitioner’s failure to
report $162,500 of the settlement proceeds.
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Last modified: November 10, 2007