settlement payment

Forum|Forum|4 years ago
February 8, 2022
2 replies
12 views

Hi, I received a payment of $97.43 from the GM Ignition switch settlement. Have not received a 1099 or any tax form. Should this be reported as misc income? Thanks

1099-Misc

Opus 17

Level 15

For a personal vehicle, I would say no. This would be treated as a payment for damages or loss in resale value of the vehicle.

For a business vehicle, this would be a taxable recovery if you have fully depreciated the vehicle already.

poppopeddAuthor

Level 2

Thank you. Have a great day

Opus 17

Level 15

A settlement for property damages is not taxable unless it is more than the damages.

Property settlements for loss in value of property that are less than the adjusted basis of your property are not taxable and generally do not need to be reported on your tax return. However, you must reduce your basis in the property by the amount of the settlement.

https://www.irs.gov/pub/irs-pdf/p4345.pdf