Mercedes Blue Tec Class Action Money

[grlasnier]

I received a payment of $3,500 from the Mercedes Blue Tech class action suit.  No 1099 was issued.  Has anyone researched this payment to determine whether there are grounds for excluding it from taxable income?    

[MinhT1]

This settlement is to compensate you for the loss in value of your vehicle. 

It is in fact a reduction in the cost basis of your vehicle and is NOT taxable. 

You do not have to report it on your tax return.

[grlasnier]

That is great news.  I tried to learn what the payment was for, but could not see this reasoning in the materials I had received from the lawyers.  It would be interesting and helpful to know how you learned that the payment was due to loss of value in the vehicle.

[MinhT1 · Accepted solution]

This is litigation about the "qualities and characteristics of the products".

In the MB BlueTec Settlement FAQ, it is stated that:

Plaintiffs also claim that the Defendants intentionally misled consumers about the qualities and characteristics of the Subject Vehicles.

Please also read this IRS document on Settlements, in particular the paragraph on Loss-in-value of property.

[grlasnier]

Thanks so much for that information.  Very helpful