Are Wildfire Settlements Taxable?
According to Forbes, wildfire settlements are often taxable. Tax considerations can be complicated and are unique to your personal circumstances, assets, losses, and insurance policy.
As a victim of the Dixie Fire, it is in your interests to secure taxation terms that are favorable to you. You may hire a personal injury lawyer from our firm to seek fair compensation and defend you from unfair taxation.
As a Victim of the Dixie Fire, Am I Entitled to Compensation?
Started in July 2021, the Dixie Fire created massive damage across five counties in California, per InciWeb. Affected areas include Butte, Lassen, Plumas, Shasta, and Tehama Counties. If you or a loved one suffered property damage, injuries, or you lost a loved one in the Dixie Fire, you may be entitled to compensation.
Who Is Liable for Damages Caused by the Dixie Fire?
After an inquiry, the state of California found Pacific Gas & Electric (PG&E) responsible for the Dixie Fire. The California Department of Forestry and Fire Protection (CAL FIRE) found that power lines contacting trees sparked the Dixie Fire. Because PG&E has a duty to monitor its power lines and remove possible fire hazards, it was deemed responsible for the Dixie Fire.
Based on the circumstances of the fire, PG&E may have been negligent by:
- Failing to adequately monitor its power lines, including the stretch west of the Cresta Dam where the Dixie Fire is thought to have originated
- Failing to properly cut tree limbs that could meet its power lines
- Putting those in the vicinity of its power lines at risk of losing property and loved ones to the resulting wildfire
Per PG&E, the utility company reached an agreement with district attorneys in California to avoid criminal charges. While PG&E also agreed to financial settlements with affected counties, the company remains open to civil liability.
What Damages Can I Recover for My Wildfire-Related Losses?
You may recover compensation for any losses that you suffered in the Dixie Fire. As attorneys representing several clients harmed by the Dixie Fire, we know that your losses may include:
- Damage to, or complete loss of, your home
- Damage to motor vehicles
- Damage to or loss of your outdoor property
- Damage to agricultural assets, including crops
- Emotional anguish and other types of pain and suffering
- The cost of temporary housing
- Lost income
- Lost earning power
- Business interruption expenses
- Loss of employees’ wages
- Medical expenses
- Loss of loved ones, pets, and livestock
Fire causes immense damage, and the Dixie Fire was no exception. Our team will complete a thorough accounting of your damages.
Tax Considerations for a Claim or Lawsuit Can Cause All Kinds of Headaches
As Forbes explains, the IRS generally taxes legal settlements related to wildfires. There are exceptions to this general rule, though. When evaluating the appropriate amount of tax you should (or shouldn’t) face for a wildfire settlement, your attorney may consider:
- The current application of legislation like AB-1249, which provides tax relief for those who’ve suffered losses in a wildfire
- Whether your losses fall within the Federal Emergency Management Agency’s (FEMA) Fire Management Assistance Grant (FMAG), which may have unique tax implications
- The value of your home and other property damaged or lost in the Dixie Fire, as considerations like purchase price and valuation at the time of the fire may be relevant
- Any other factors that are relevant to your case
Taxes are a key consideration in whether you receive fair compensation. If you’re taxed unfairly or excessively, then you may not have the funds you need to recover from the Dixie Fire.
Should I Hire an Attorney to Help With My Wildfire Claim or Lawsuit?
It may be wise to hire an attorney. Wildfire claims and lawsuits are never simple. Hiring an attorney who has experience handling these claims may be comforting and extraordinarily helpful.
You may hire a lawyer from our firm because:
- We are actively handling claims against PG&E, understand the nature of this claim type, and have experts, evidence, and other resources on our side
- You are in a state of emotional distress, making it difficult to handle a legal case or claim on your own
- You are completely occupied by your recovery from the Dixie Fire
- You are not confident in handling your case on your own
An attorney from our firm will defend you from unfair settlements, deceptive practices, and other attempts to undermine your claim. Focus on your health, sanity, and loved ones. Let our team seek the compensation that you deserve.
Call Nadrich & Cohen Today for a Free Consultation About Your Wildfire Claim
The aftermath of any wildfire is extremely trying. Don’t try to take on insurance companies or PG&E without legal help. You may be quickly overwhelmed by the process that lies ahead.
Nadrich & Cohen is ready to help. Call us today about leading your Dixie Fire claim. We’ll seek financial justice from those responsible for your losses.