Carson, CA asked in Tax Law for California

Q: Recently, I received in my mailbox a sizable check from a class settlement of a joint car purchase made many years ago.

Please delete. Thanks

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1 Lawyer Answer
Maurice Mandel II
Maurice Mandel II
  • Newport Beach, CA
  • Licensed in California

A: Very good to see that you are planning ahead on this. My question is why is this taxable in the first instance, if this was for a recovery in litigation over a defective vehicle? But apparently you satisfied yourself on that issue. Why go with a cashier's check? You could have a personal check drawn on the account into which you are depositing the funds that would show the distribution. You can 1099 her for the 2020 payment. You could write up an agreement too. All of these are good ideas. I would contact a local CPA to see what they say, about taxability and your tax offset. This is better than posting on this forum.

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