Is a settlement from PGE for the Slater Fire taxable to my client?

Forum|Forum|1 year ago
July 17, 2024
1 reply
10 views

My client lost a rental house in 2020 in the Slater Fire. She received $ from the insurance company and it was reported in the 2020 tax returns. Now, she is part of a lawsuit with PGE and is expecting a six figure payout. I have researched this within the IRS website, but cannot find out if this is taxable or how many years she has to reinvest this amount if it is taxable. I just need someone to point me to a website or a tax regulation for this issue. Thanks.

Lacerte Tax

This topic has been closed for replies.

qbteachmt

Level 15

Is this a CA client or OR client? Or are you asking about Federal tax? It's a bit confusing how you asked.

The insurance paid for the property.

The law suit will be a settlement. There would not be a reinvestment provision for a lawsuit.

Don't yell at us; we're volunteers

George4Tacks

Level 15

Are you asking about IRC 1033 replacement? https://www.law.cornell.edu/uscode/text/26/1033

Answers are easy. Questions are hard!

qbteachmt

Level 15

I looked under the couch and all I could find that has passed is for settlement exemption for CA (Newsom). Others, including Federal, were introduced, but never went anywhere.

Don't yell at us; we're volunteers

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded