Gunner, that law was passed in1996 when your hero the Newt and your beloved
Republicans were running things in Congress. It is in the "Small Business
Protection Act", part of their "Contract on America".

It can actually teg much worse than your example. In the O'Gilive case that
the SCOUS decided, the family that won a $10 Mil award when their mother
died from toxic shock. After legal fees and taxes they owed the IRS
$500,000 more than they received.

--
Glenn Ashmore

I'm building a 45' cutter in strip/composite. Watch my progress (or lack
there of) at: http://www.rutuonline.com
Shameless Commercial Division: http://www.spade-anchor-us.com

"Gunner" wrote in message
...


The US Supreme court handed down a decision today that will make the
entire Jury award taxable by the IRS as Normal Income and disallows
attorney fees to be deducted from the amount. The supreme court said
that since you don't pay the fees if you loose they can not be deducted
if you win. Therefor the money that was paid to attorneys as a
contingency was disallowed as a deduction.

What this means is

You get a 10,000,000 dollar jury award
you Pay US income Tax on the award of 38.6% (top rate)
You Pay State Income Tax of 8% (taken form tax tables of states with
highest jury awards)
Total Tax bite is 46.8%
Payment to attorneys for winning the case 40% of the total award
Total tax and attorney fees is 86.8%

What you have left is 13.2% of 10 million or
1.32 million dollars out of a ten million dollar settlement

What do the attorneys get??? They get to claim all the expert witness
fees, per diem, suits, laundry services, meals, entertainment costs, (to
include booze and hookers)and every thing under the sun so they probably
will get to keep 3 million of their fees.

So the brake down of a 10 million jury award
4.68 million to Federal and state Government
3.0 million to attorney
1.32 million to plaintive

What does this mean??

Well of the top of my head you won't see any more 10 million dollar
awards they will now be 100 million dollar awards.

The price of insurance will go up 1000% if you can get it which means
you won't.


"Considering the events of recent years,
the world has a long way to go to regain
its credibility and reputation with the US."
unknown