Mortgage Servicing and Loan Modifications: 11.11.4.2 Settlement Should Specify Nature of All Damages
In all cases, attorneys should take care to specify the source of the damages. Replacement for out-of-pocket costs will be non-taxable; replacement for lost income, occasioned by, for example, time off work, will be taxable. Out-of-pocket costs may include repairs made to a home, return of excess interest paid, the inflated value of a purchased home, as well as more mundane out-of-pocket expenses, such as medical bills and transportation costs.