Personal Injury K-1

A personal injury settlement was received for my deceased brother's estate. I am not including it as income on his estate's return but do I include it on the K-1 for distributions made to his beneficiaries?

posted

No. Most personal injury settlements are not taxable income to the recipient, including the estate and their beneficiaries. The taxable distribution is only for income that should be taxed. Since it is not income to the estate, it is not taxable income to the beneficiaries. Be sure there are no taxable parts like punitive damages or interest.

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