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…
TEN TOP MEDICAID PLANNING STRATEGIES
by Thomas D. Begley, Jr., Esquire, CELA Medicaid Planning strategies basically fall into two categories: spend down and transfer of assets. The ten top strategies include the following: There are several options with respect to the home. The home could be transferred to the community spouse without a transfer of asset penalty. However, if…
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…
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…