INFORMATION DEPARTMENT VOLUME 8, NUMBER 8
How IRS Taxes Kill Plaintiff's $289M Monsanto Weedkiller Verdict
The news that jurors gave $289 million to a man they say got cancer from Monsanto's Roundup weedkiller might make you think the plaintiff will get rich. Dewayne Johnson can't count on the money, as Monsanto says it will appeal. Monsanto faces hundreds of other claims, and may fight hard. But even if Monsanto forks over the money, new tax rules will be as effective as Roundup in swallowing up most of Mr. Johnson's big verdict. Under President Trump's tax bill passed in late 2017, there is a new tax on litigation settlements: no deduction for legal fees.
legal fees simply can't be deducted. That means Mr. Johnson must
pay tax even on monies his attorney collects. That is so even though the
attorney must also pay tax on the same money. Here's the bizarre new math.
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Unless you have been living under a rock for the last 10 years, you know that the IRS cares about offshore bank accounts.
If you have a bank account outside the U.S., chances are you will receive a letter saying that your bank must hand over the details of any American accounts, including yours.
Serious accident cases can produce tax-free money to clients. But this tax-free treatment only apples to compensatory damages. Punitive damages and interest are taxable, and there are key changes under the Trump tax law.
Tax indemnity provisions generally state that one party will cover taxes if they are due. Such clauses are common in many types of agreements. Now after the passage of the Tax Cuts and Jobs Act in 2017, they are taking on new importance.
What items are taxable? It's easy to remember wages, since you receive a Form W-2. Yet a variety of events can give you taxable income even though you’ve seen no cash.
There is considerable talk today about crypto investments for everyone, for individual retirement accounts, via index funds, and more. All of these raise tax issues, and they can be confusing.
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