It depends on the circumstance and type of settlement you received. It is my understanding that your payment was for the loss of property value caused by contamination from a radioactive substance used in the Rocky Flats nuclear plant.
As I mentioned in my initial response, if your basis on the property was less than the payment you received, then the payment is not taxable. You just have to reduce your basis by the settlement amount.
If the payment received is more than your basis in the property, then the excess becomes taxable income.
I mention these two scenarios because I do not have more detail about your particular circumstance. I am providing you with an answer based on the public information that is available to us.
Below are more situations that can cause a settlement to be taxable or not. Please read.
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