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Deductions & credits
It depends. The IRS Pub 544 addresses the cancelation of a lease for payment. Page 2 states, "Payments received by a tenant for the cancellation of a lease are treated as an amount realized from the sale of property." The relocation payment is taxable.
I advise you to contact a tax professional, to address if the disability payment is taxable.
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March 26, 2023
3:54 PM