Auto accident settlement & 06 taxes

[whatamess]

Fishing for info..off topic but:
My eyes hurt from a search on the IRS website. Has anyone had an auto accident settlement for personal injury & medical expenses? If so am I to claim this as income on my 2006 taxes?
I *think* its only for punitive damages and wages lost you have t pay taxes right?
I dunno!
WAM

[lrprn]

According to this MSN Money article, Win in court without losing to the IRS, at http://articles.moneycentral.msn.com...gToTheIRS.aspx -
"For a verdict or settlement to be tax-free, it must be structured to meet two new code requirements:

- A physical injury or illness must have occurred. Without either, the proceeds will clearly be taxable.

- The injury or illness must be the result of a tort -- a wrongful act, injury or action. If you successfully sue someone who hit your car, the award will be tax-free. But if you win a back pay judgment from a breach of contract suit, the award is taxable income. It resulted from a contract dispute."

So your answer appears to depend on whether you were physically injured in your accident and whether the settlement was awarded because of wrong-doing by the other party.

Of course, the best way to get the right answer for your own unique situation is to ask a good tax accountant - I encouraage you to do just that. Now go rest those weary eyes!

[whatamess]

Thanks

Thats what I seem to be getting, I usually use Turbo tax myself, its cheap and really excellent. Since I own virtually nothing except a half paid off car, I never have any complicated deductions.
I want to get them done asap so I have attorney loot for the BR!!! I intend on keeping the leftover money for dental needs. I dont want any trustee getting a hold of it!
WAM