What Are The Tax Implications Of Selling A Structured Settlement?
Doesn’t it sometimes seem as if you can’t make any financial move without the government stretching their hand out and asking for a portion of it. They call it taxes, but for most of us it’s just another way we are soon parted with out money. Believe it or not, that same government won’t charge you taxes on the sale of your structured settlement.
The IRS issued Private Letter Ruling 119273-97 which states that selling rights to structured settlement payments would not create a tax liability to the seller. Amazing huh? Be advised, however, that any interest you make on investments with the money is 100% taxable.
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A Lumpy Deal When it Comes to Lottery Winnings
Yes, winning a $1 million is fantastic. But it loses some of its appeal when you find out the annual payment is $22,000 plus or minus some dollars and is paid out over 20 years. Isn’t that less than poverty income level? The annual lottery payment is nice, but a lump sum would be much better.
Read moreI Can Manage My Own Portfolio…Thank You Anyway
if you have the confidence to manage your own investments, and aren’t interested in maintaining long term payments, it might be time to sell part or all of the payments. The first step is to consult with a professional settlement broker who can help you work through the numbers. You can gain control of your own money and do what you want with it.
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