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Old 04-18-2009, 07:10 AM   #1
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For You Tax Experts...

Here's a little puzzler for you tax experts. I offered to help a relative with her taxes. She started a goat dairy farm this year. She bought a prize young animal for $1000. About a year later, she bought some feed supplement for this animal, which unfortunately poisoned and killed it. Very traumatic for both farmer and animal. The manufacturer eventually paid an out-of-court settlement of $9,000 to avoid publicity and replace the lost income from the animal.

Is the $9,000 taxable?

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Old 04-18-2009, 07:24 AM   #2
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Harm to property is taxable to the extent the settlement exceeds the basis in the property. Lost profits are taxable.

See my signature.


No more lawyer stuff, no more political stuff, so no more CYA

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Old 04-20-2009, 09:17 AM   #3
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As Martha said.... look at her sig line for ME also

It is like she 'sold' them the animal. Now, if she had gotten them to say they were paying $1,000 for the animal and $8,000 for trauma... that is a different story (IIRC)...
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