Ten Strategies to Maximize the Tax Deductibility of Settlements (Part Two of Two)

Tax structuring is a concept more often associated with business transactions than with legal settlements.  But in a recent presentation, Shearman & Sterling partner Lawrence M. Hill highlighted the fundamental role of tax in the net economics of legal settlements.  Informed tax structuring can dramatically reduce the dollars that go out the door in a legal settlement, and tax counsel can powerfully affect the economics of settlements.  In his presentation, Hill discussed ten specific strategies that companies can use to maximize the tax deductibility of legal settlements.  This article – the second in a two-part series – describes those ten strategies.  The first article in this series offered a comprehensive overview of the law governing taxation of settlements.

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