Damage Settlement Agreements

Damage settlement agreements resolve a dispute involving damages, usually within a court system leading to dismissal of a civil case. Typically, this constitutes both parties agreeing upon a stipulated amount of monies to cover damages related to property or personal losses.

Involved Parties

Parties involved in such court proceedings may include individuals, certain groups of a population, businesses, government and other formal entities. Class action damage settlement agreements are in regard to a group of individuals, whereas individual proceedings are related to an individual sustaining loss or damage.

Settlement Types

Settlement agreements apply to various kinds of damages. This may include business law, involving contracts and debt, or personal law involving property and personal suffering. Law regarding wills, trusts and estates of the deceased are not excluded.

Tax Implications

Certain damages resulting in reimbursement require the individual to file taxes on the settlement amount, including those of economic interest and gain. The whole amount or portion of the settlement is taxable. However, torts involving damages related to property or personal injury are often tax deductible. This varies case by case.

References

• Lawsuit and Settlement Awards: Internal Revenue Service
• Settlement: Cornell University Law School's Legal Information Institute
• Civil Rights: University of California Davis