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hi everyone Im John Miller CPA and here for another video this time were going to talk about settlements from a lawsuit you know sometimes I have clients come to me and they go hey John I just got a settlement from a court case that I won is the settlement taxable and the answer to that question is it depends because this several different kinds of settlements that you can get there are several different kinds of damages out there and depending on what they are will determine whether or not de taxable probably the most frequent one that I get is say somebodys involved in a car accident and they get a settlement from the insurance company now those are compensatory damages or pain and suffering and those damages are not taxable because basically those are damages to compensate you for a loss and so its not really considered to be income because it doesnt make you better off than you were before in other words in order to get a settlement you had to prove that you were damaged and
