I am going to receive a cash settlement for a lawsuit relating to my car being subject to lemon law. Please advise whether this amount is taxable income. Thanks.

[Critter]

See this thread :  

https://ttlc.intuit.com/community/retirement/discussion/lemon-law-settlement-taxable/00/713428

[STC3]

does anyone know, ( I used my SUV for section 179 deduction and now the car's company want to buy back my SUV due to lemon law, what should I do now for last year (2021) tax deduction?     will I need to pay back all the deduction amount? that is over 25K

[Opus 17]

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@STC3 wrote:

does anyone know, ( I used my SUV for section 179 deduction and now the car's company want to buy back my SUV due to lemon law, what should I do now for last year (2021) tax deduction?     will I need to pay back all the deduction amount? that is over 25K

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For a business vehicle, you will report on your 2022 tax return that you sold the vehicle.  That will result a taxable "recapture" of the previous depreciation.  You don't amend the 2021 return.