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Submitted 352 days ago...

ecs

New User (1)

Tax Consequences of Settlement

My son was kicked out of his public school just before the end of the semester in June 2007. I spent money putting him into private school for the 2007-2008 school year, and hired an attorney to fight the school board's decision. The school board settled with me out of court, welcoming my son back to his public school and agreeing to clear his record. The board also agreed to reimburse me for the attorney fees and private school tuition I spent for the 2007-2008 school year.

The settlement agreement mentions I'm responsible for any tax consequences. Are there any tax consequences? I'm just being reimbursed for money I already spent. The settlement was in 2007, but I may not actually receive the check until 2008. Does that make a difference for my 2007 taxes?

Thanks.

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Answer 1 / 2

Submitted 352 days ago...

nyasialilie

New User (5)

Yes it does.

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Answer 2 / 2

Submitted 351 days ago...

slhansley

Beginner (16)

You don't report any income that you have not received so if you get it in 2008 that's when you report it and considering that it was your money for the year of 2007 but in 2008 it is considered extra money that you would not normally have and there for will have to be added to your income

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