If I cashed in a lawsuit money in 2017 would that effect my 2016 tax refund

sambennish6868 — Tue, 04 Jun 2019 01:14:35 GMT

It depends. If you have received this lawsuit money in 20...

MinhT — Tue, 04 Jun 2019 01:14:37 GMT

It depends.

If you have received this lawsuit money in 2016 and this amount is taxable, you must report the amount in your 2016 tax return, even if you only deposit the check in your account in 2017.

If you did not receive the check in 2016 but only in 2017, then you will report the amount in your 2017 tax return next year.

This is what the IRS calls constructive receipt. And the IRS has given some examples below:

Constructive receipt. Income is constructively received when an amount is credited to your account or made available to you without restriction. You do not need to have possession of it. If you authorize someone to be your agent and receive income for you, you are considered to have received it when your agent receives it. Income is not constructively received if your control of its receipt is subject to substantial restrictions or limitations.

Example.

You are a calendar year taxpayer. Your bank credited, and made available, interest to your bank account in December 2016. You did not withdraw it or enter it into your books until 2017. You must include the amount in gross income for 2016, the year you constructively received the interest income.

You cannot hold checks or postpone taking possession of similar property from one tax year to another to postpone paying tax on the income. You must report the income in the year the property is received or made available to you without restriction.

Thank you so much I did only just receive the check today...

sambennish6868 — Tue, 04 Jun 2019 01:14:39 GMT

Thank you so much I did only just receive the check today in 2017

topic If I cashed in a lawsuit money in 2017 would that effect my 2016 tax refund in Deductions & credits

If I cashed in a lawsuit money in 2017 would that effect my 2016 tax refund

It depends. If you have received this lawsuit money in 20...

Thank you so much I did only just receive the check today...