Demystifying the Tax Consequences of Court Settlements
What are Court Settlements? By definition, a court settlement is an agreement reached by two or more parties to be accepted and approved by a court of law. The agreed upon terms of a settlement are usually incorporated into a written contract that is submitted to the court for approval. Settlement agreements are typically reached following negotiations among the parties and their attorneys. If both sides are represented by attorneys, then discovery between the parties has likely been completed and…