In this thread -
@David_Brannen said,
“Taxation of LTD settlements has changed over the past few years. Basically, if your payments were non-taxable then the entire lump settement is non-taxable. However, if your monthly LTD payments were taxable, then the portion of the LTD Lump Sump payment attributable to past payments (as opposed to future payments) would be taxable. Also, if you incur a legal fee, a portion of the legal fee is tax deductible as long as the lawyer provides the correct paperwork and declarations to you.”
I just want to make sure if I have a basic understanding of the rule.