Selling a structured settlement annuity loan payments: An article to guide you understand before making a decision to sell a structured annuity settlement for quick cash advance.
There are people who can’t just rely in their monthly in come and need extra quick and easy cash to pay off unexpected medical bills, credit cards that are quickly accumulating interest or for your home repairs.
Not just for paying back loans: One of the common reasons to sell a structured settlement is financial concern, such as pay off all of your debts, pay off the credit cards, pay off the car loans and pay off the mortgage, but all structured settlement sales must be approved by a court.
All court approved sales from selling structured settlement should follow the tax exempt stipulation as well.
“In 2002, the United States government established Internal Revenue Code 5891, giving states jurisdiction over structured settlement sales.”
What is a structured settlement?
An agreement between the plaintiff and a defendant in a court case— An insurance arrangement whereby a claimant agrees to resolve a personal injury tort claim by receiving periodic payments on an agreed schedule rather than as a lump sum that may include income tax and spendthrift requirements as well as benefits and are considered to be an asset-backed security.
The structured settlement industry notes that the federal tax code has recognized and encouraged the use of structured settlements as a way for accident victims to receive guaranteed, tax-free income tailored to their future needs.
You want to sell structured settlement annuity but you don’t know what to do? You need an experienced and professional financial planner, financial adviser such as a certified public accountant. When you have made your decision to sell all or part of your structured settlement, there are some very important factors to keep in mind.
You need to carefully check structured settlement companies before even contacting for a quote, it would certainly be considered beneficial to look into the company’s business and customer experience histories.
Do a simple online search because good and reliable companies should provide you with enough of information you need, regarding both consumer reviews and general business relations.
What are the Taxed Settlements?
Will I Pay taxes if I Sell Structured Settlement Payments? In some cases, yes you need to pay taxes. An example would be damages awarded due to a workplace dispute. You might be paying taxes and in this case you would most likely be required to pay taxes on the sale of your structured settlement payments. However, there are structured settlements payments that are not subject for taxes.
What are the on-taxed Settlements?
In most cases, structured settlements are awarded due to physical injury tort claims, they are often not counted as income of the recipient and therefore not subject to tax, includes the original amount of money in the annuity as well as the interest it earns, and will apply even if you sell your settlement for a lump sum.