Payment For Future Money
Tax-Free Payments for Future Money
Section 104 of the Internal Revenue Code of 1986 (IRC), as amended [also
known as 26 USC §§ 104], provides that: "Compensation for injuries or
sickness - (a) In general, except in the case of amounts attributable to
(and not in excess of) deductions allowed under section 213 (relating to
medical injuries, expenses, etc.) for any prior taxable year, gross
income does not include - (1) amounts received under workers'
compensation acts as compensation for personal injuries or sickness; and
(2) the amount of any damages (other than punitive damages) received
(whether by suit or agreement and whether as lump sums or as periodic
payments) on account of personal physical injuries or physical sickness."
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Brokering the Deal
Preliminary research has indicated that there are more than 400,000
individuals nationwide that have been awarded structured settlements. An
important question that you should ask a broker when considering getting a
lump sum payment for future money is how many underwriters will they
present your transaction to? This is a very critical issue because many
brokers have entered into exclusive contracts with the 'funders' or buyers
of structured settlements themselves and it may limit you on the amount
you receive. >>
Purchasing Structured Settlements
Brokers Handling the Purchasing of Structured Settlements
Insurance companies make a ton of money on structured settlements. In the
process of helping individuals sell their payments, there are brokers who
handle the purchasing of structured settlements and are educating people
about 'structured settlements' in general. The insurance companies do not
want people to learn the true nature of what a structured settlement is
all about. They of course have a vested interest in keeping people in the
dark. Brokers that handle the purchasing of structured settlements are
putting a serious crimp in their style, shedding light on a subject that
they want to keep hidden. >>
On the Flip-Side - Brokers Assist With Initial Transactions
During the initial process of obtaining a structured settlement, a broker
can obtain quotes and assist in purchasing structured settlements from
highly-rated annuity companies. They will work closely with all parties
involved and will have your best interests in mind. If the defense makes a
structured settlement offer, it is important to understand the cost, or
present value of the future payments in order to compare it with an
immediate lump sum payment. Often, the plaintiff's attorney alone, cannot
decipher this. Additionally, he or she may want to make a counteroffer,
either increasing the payments or changing the timing to provide for the
known needs of their client. A broker can help the plaintiff's attorney do
just that as well as guide them through the entire process.>>
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