Lemon Law Settlement - Spidell

Lemon Law Settlement

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Message Board Lemon Law Settlement

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    • #249720
      Anonymous
      Member

      A client received a substantial settlement from the auto manufacturer, which included the payoff of the remaining loan on the vehicle. The loan was through a third party lender.

      Can the taxable portion of the settlement (which is almost all of it) be reduced by the amount of the loan payoff?

       

      Thank you.

    • #249984
      Diane White
      Participant

      The loan payoff may not reduce the taxable portion.  However if your client was charged prepayment penalties, early termination charges, or had finance charges added up front in advance of the obligation those may reduce the taxable portion.

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