Question: When a company loses a case, is that amount pre-tax or post-tax?
I was reading about HP’s $14.5 million settlement today and it got me curious.
When a company loses a case or settles, is this money coming from pre-tax revenue (and hence, would be a tax deductible cost)? Or is it coming from post-tax profit?
Do any of the following factors affect the answer?
- It’s a settlement vs loss/guilty?
- Paid to the government (as a fine) vs paid to another company/individual?
- Punitive damages vs compensatory damages.
A related question I have is, for example, whether a traffic ticket given to a driver working for a company at the time of the ticket is a “cost” that can be written off by the company?
Items on Amazon Right Now for Fines Tax Deductible:
Details of Obama’s health care plan
President Barack Obama’s health care overhaul proposal builds on legislation passed Christmas Eve by the Senate and makes some changes to placate Democrats in the House. On Tuesday, he said he was open to incorporating four Republican ideas.
Evil Xmas Song