How to calculate cost basis for assets awarded in a court judgement?

[bernorange 8,375]

I saw this quirky story:

Quote

Handsome Debonair Guy v. Family Dollar Store Owner

Complaint: I, Handsome Debonair Guy, was assaulted by Family Dollar Store employees. While I was shoplifting. They broke my ribs and gouged my throat with 2-inch fingernails. Now I'm suing for (a) $3.5 million, or (b) an out-of-court settlement for $350K and court fees and "(5) single bars of gold – 1 oz each," or (c) $1M cash and court fees.
...

and I got to wondering, if someone were awarded "(5) single bars of gold – 1 oz each" (or any quantity of gold or another asset like 5 shares of stock or whatever), how would one determine the proper cost basis for the award for capital gains calculations/taxes?

[KaiserSoze 998]

It's always tree fiddy.

[NeverMarryAStripper 22,030]

I would suggest that you not shoplift from that Family Dollar Store anymore.

[Doc Daneeka 6,769]

Market value — price per ounce, stock price, etc. — on the date of the award?

Sounds like a rough place even by Family Dollar standards. I wonder how they broke his ribs. 

[bernorange 8,375]

13 minutes ago, Doc Daneeka said:

...

Sounds like a rough place even by Family Dollar standards. I wonder how they broke his ribs. 

He was only expecting a dollar when they gave him the old tree fiddy.

[Jerry Callo 8,830]

You are not going to be award bars of gold by a court for personal injuries.  However, if you were, the basis would likely be the market value at the time of the award. 

This case is very similar to Ezal v. The South Central Convenience Store:  Aw, oh my God, oh my God, oh my God. God. Oh, I'm hurt. Oh, my neck, my back, my neck and my back. Oh, I want $150,000, but we can settle out of court right now for twenty bucks.  

[Brisketexan 105,572]

12 minutes ago, Jerry Callo said:

You are not going to be award bars of gold by a court for personal injuries.  However, if you were, the basis would likely be the market value at the time of the award. 

This case is very similar to Ezal v. The South Central Convenience Store:  Aw, oh my God, oh my God, oh my God. God. Oh, I'm hurt. Oh, my neck, my back, my neck and my back. Oh, I want $150,000, but we can settle out of court right now for twenty bucks.  

He woulda had a better shot at those damages if he hadn't ratted out Smokey taking a shit outside.

[bernorange 8,375]

Just realized I forgot the source link for my quote in the OP.  D'oh!

https://reason.com/volokh/2023/02/21/handsome-debonair-guy-v-family-dollar-store-owner/

[Brew 3,049]

Market value at the settlement date which would also be used for his taxable income on the settlement.

[Doc Daneeka 6,769]

Personal injury recovery is taxable?

[Dahobbs 17,808]

15 minutes ago, Doc Daneeka said:

Personal injury recovery is taxable?

Generally, no (except for punitive damages and things like lost wages). But the question here is about determining of the basis of assets received in order to calculate future taxes based upon appreciation of the assets. 

The answer has to be the value at the time the assets are actually transferred. A judgment by itself doesn't indicate anything was or will be transferred. 

[Doc Daneeka 6,769]

3 minutes ago, Dahobbs said:

Generally, no (except for punitive damages and things like lost wages). But the question here is about determining of the basis of assets received in order to calculate future taxes based upon appreciation of the assets. 

The answer has to be the value at the time the assets are actually transferred. A judgment by itself doesn't indicate anything was or will be transferred. 

“Market value at the settlement date which would also be used for his taxable income on the settlement.”

[Dahobbs 17,808]

4 minutes ago, Doc Daneeka said:

“Market value at the settlement date which would also be used for his taxable income on the settlement.”

I see, I was referring to the op. Generally a PI award isn't taxable. The exceptions are any portions for punitive damages or lost wages. 

[DalTxHornFan 3,122]