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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: Merlo who wrote (3583)	4/7/1999 12:45:00 AM
From: Gary Korn	Read Replies (1) \| Respond to of 6439

Does anyone know if lawyers fees and damage awards are tax deductible? A personal injury award for pain and suffering generally is not counted as gross income. Hence, it is not taxable. However, that part of an award that is compensation for lost income is supposed to be included in gross income (this second rule typically comes up in employment litigation cases). Attorneys fees, in these tobacco cases, are based on a percentage. Thus, if the total verdict is $25M after trial, and the lawyer keeps 40%, the plaintiff (or his/her estate) will take home 60% of $25M (less costs that have been incurred). This being the case, there need be no separate reporting of attorneys fees and no reason to worry about the deductibility of same. Gary Korn