Last year I sued my former "friendly" stockbroker for malpractice (churning, unsuitable investments, the works) and received a settlement from the firm (out of court -- we never went to arbitration). No taxes were withheld. I now received a form 1099-MISC with the settlement reported in box 3 ("Other Income"). I called IRS and they said the settlement was punitive damages and it is taxable. Does anyone have anything to say about this? After getting cheated by the broker, do I now have to share the reparations with Uncle Sammy? Is life just not fair?Thanks.
After getting cheated by the broker, do I now have to share the reparations with Uncle Sammy?Yes, you do.Is life just not fair?Well, I guess you could sue whoever told you life was suppose to be fair, because as far as I know, life has nothing to do with being fair.e
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