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INCOME TAXATION IN PERSONAL INJURY CASES

by Thomas D. Begley, Jr., Esquire, CELA   Generally, personal injury damages are excludable from taxation.[1] The Code deals with compensation for injuries and sickness and states, “[i]n general, gross income does not include the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or…

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MEDICAID PLANNING IN NEW JERSEY: LEVELS OF LONG-TERM CARE, COST AND ELIGIBILITY

by Thomas D. Begley, Jr., Esquire, CELA There are four frequently used levels of care in New Jersey.  The cost of adult day care averages $70 to $120 per day, home care averages $28 per hour from an agency, assisted living averages $6,000 to $10,000 per month, and nursing homes cost $10,000 to $14,000 per…

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TAX ISSUES IN PERSONAL INJURY RECOVERIES

by Thomas D. Begley, Jr., Esquire, CELA   Origin of the Claim Test The determining factor as to how a litigation settlement or award will be treated for tax purposes is the origin of the underlying claim. The Supreme Court has held, “[t]he origin and character of the claim with respect to which an expense…

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THE PERSONAL INJURY ATTORNEY’S GUIDE TO MEDICAID

by Thomas D. Begley, Jr., Esquire, CELA              There are many pathways to Medicaid in New Jersey.  Each one has different income requirements and resource limits, some have transfer of asset penalties, some require disability, and some require that a personal injury settlement be placed in a Special Needs Trust to maintain eligibility while…

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