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Q.Are damages awarded in a wrongful death case taxable?

A.Damages received under a wrongful death statute for physical injury are generally excluded from the taxable estate, but any portion of the award that was earmarked for pain and suffering, or as reimbursement for medical expenses is taxable and should be included in the taxable estate. (IRS Rulings 69-8, 54-19, 75-127, 75-126, 83-44.)

Amounts awarded as Punitive Damages are also taxable income, and should be included in the taxable estate. See, Internal Revenue Code Section 104(a)(2).



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