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Tax question for lawyers

1378 Views 31 Replies 13 Participants Last post by  DNeurococo
I was told recently that someone won a $500,000 law suit. It was appealed and the final settlement was reduced to about $325,000.
The person paid the lawyer about $125,000. They were told by two tax attorneys that they had to pay taxes on the original $500,000 award AND had to pay taxes themselves on the amount the lawyer got too.

I assume this must be right if two tax attorneys agree. :eek:
I assume that the lawyer will get taxed on the amount they received also.
First, isn't that double taxing the legal fees?
Second, why would they have to pay taxes on an amount they nere received?

Please inform the weak of legal and tax minded!

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gbrumb said:
Well not only is Bush *****in but so is life. Lets see what the Bass man has to say, first. :D
I am tempted to go out and run Bassetman down. (I have a suspicion I know where he might be this time of night.) I sure look forward to his response. Good one GB.
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