Tuesday, August 14, 2012

Supreme Court: Class Action Settlement is Taxable Income

In the case of Chaim Keren v. the Gush Dan Assessment Officer, the Supreme Court rejected Mr. Keren's appeal of the judgment which held that a plaintiff who receives compensation pursuant to a judgment approving a settlement agreement in a class action, can be taxed on that income. The Court held that the plaintiff's award is like income of a commercial nature. Therefore, it can be taxed in accordance with law, and deducted or offset like any other income.



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