settlement payment

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

posted

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.

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