What is the settlement with JC Penney?
The Settlement generally provides for payments to individuals who were participants in or beneficiaries of the J. C. Penney Corporation, Inc. Savings, Profit Sharing and Stock Ownership Plan (the “Plan”) at any time from November 1, 2011 through May 31, 2016 and whose Plan accounts included investments in the J. C. Penney common stock fund.
Do you have to pay taxes on a settlement?
Tax Implications of Settlements and Judgments The general rule of taxability for amounts received from settlement of lawsuits and other legal remedies is Internal Revenue Code (IRC) Section 61 that states all income is taxable from whatever source derived, unless exempted by another section of the code.
What is the settlement consideration for the settlement fund?
Detailed information about the settlement payments is provided on the “Commonly Asked Questions” section of this website. The Settlement consideration is a gross sum of four million five hundred thousand dollars ($4,500,000.00) (the “Gross Settlement Fund”).
When did Ullman return to Penney?
Ullman returned to lead Penney in April 2013. The newly issued stock diluted the 220 million shares outstanding. The company had $5.8 billion in debt and its interest payments have climbed to $400 million a year.
Did Penney raise capital?
The lawsuit alleged that Penney publicly assured investors that its business was improving and that it saw no need to raise capital. The statements made by former chief executive officer Mike Ullman and chief financial officer Ken Hannah in August and September 2013 misled investors regarding the company's liquidity prior to the announcement of a public stock offering in September 2013, the lawsuit said. Penney issued 84 million shares of stock and raised $800 million to get it through a cash crunch it found itself in after CEO Ron Johnson's tenure. Ullman returned to lead Penney in April 2013.
What is the tax rule for settlements?
Tax Implications of Settlements and Judgments. The general rule of taxability for amounts received from settlement of lawsuits and other legal remedies is Internal Revenue Code (IRC) Section 61 that states all income is taxable from whatever source derived, unless exempted by another section of the code. IRC Section 104 provides an exclusion ...
What is a 1.104-1 C?
Section 1.104-1 (c) defines damages received on account of personal physical injuries or physical sickness to mean an amount received (other than workers' compensation) through prosecution of a legal suit or action, or through a settlement agreement entered into in lieu of prosecution.
What is the purpose of IRC 104?
IRC Section 104 provides an exclusion from taxable income with respect to lawsuits, settlements and awards. However, the facts and circumstances surrounding each settlement payment must be considered to determine the purpose for which the money was received because not all amounts received from a settlement are exempt from taxes.
What is employment related lawsuit?
Employment-related lawsuits may arise from wrongful discharge or failure to honor contract obligations. Damages received to compensate for economic loss, for example lost wages, business income and benefits, are not excludable form gross income unless a personal physical injury caused such loss.
What is the exception to gross income?
For damages, the two most common exceptions are amounts paid for certain discrimination claims and amounts paid on account of physical injury.
What is Publication 4345?
Publication 4345, Settlements – Taxability PDF This publication will be used to educate taxpayers of tax implications when they receive a settlement check (award) from a class action lawsuit.
Is emotional distress excludable from gross income?
96-65 - Under current Section 104 (a) (2) of the Code, back pay and damages for emotional distress received to satisfy a claim for disparate treatment employment discrimination under Title VII of the 1964 Civil Rights Act are not excludable from gross income . Under former Section 104 (a) (2), back pay received to satisfy such a claim was not excludable from gross income, but damages received for emotional distress are excludable. Rev. Rul. 72-342, 84-92, and 93-88 obsoleted. Notice 95-45 superseded. Rev. Proc. 96-3 modified.
