Solved: How do I claim settlement of a law suit

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New Member

How do I claim settlement of a law suit

I am about to receive a settlement from my company for a law suit I brought against them. Do I have to report this amount as income

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New Member

How do I claim settlement of a law suit

Good afternoon

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/nttxd-eng.html

for more information contact the cra at the following Phone: 1-800-959-8281

TurboTaxLee



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New Member

How do I claim settlement of a law suit

Good afternoon

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/nttxd-eng.html

for more information contact the cra at the following Phone: 1-800-959-8281

TurboTaxLee



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New Member

How do I claim settlement of a law suit

You are also allowed to deduct legal fees in connection with obtaining this settlement, for the amount of the legal fees or the amount of the settlement, whichever is less. 

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/232/lgl-eng.html

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New Member

How do I claim settlement of a law suit

It will depend on what the settlement is for.  Per CRA:

"(a) if the compensation is received for the failure to receive a sum of money that would have been an income item if it had been received, the compensation will likely be an income receipt"

Leanne provided a very helpful link for these situations, if you scroll down to "damages, settlements and similar receipts"

http://www.cra-arc.gc.ca/E/pub/tp/it365r2/it365r2-e.html



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New Member

How do I claim settlement of a law suit

The settlement is for the loss of a taxable benefit
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New Member

How do I claim settlement of a law suit

A taxable benefit is pretty clearly income related.  It would have been taxable had you been given the benefit in the first place.
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New Member

How do I claim settlement of a law suit

Thank you That is what I thought but just wanted to make sure
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New Member

How do I claim settlement of a law suit

You can always get a second opinion from CRA as well. 1-800-959-8281
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