From Fox News:
"NEW ORLEANS - Out-of-work Gulf Coast shrimper Todd Pellegal spent his first $2,500 check from BP quickly, paying off bills and buying groceries for his family.
"He never even considered putting some of it away for taxes.
"Now he's among the people up and down the Gulf Coast reeling from the oil spill disaster who are surprised - and frustrated - to find out the Internal Revenue Service may take a chunk of the payments BP PLC is providing to help them stay afloat."
This is an odd consideration. It would seem to me that those who receive the payments would be able to write off their losses against them, so that the net taxable income would be zero.
However, whatever is decided, these people need all of the help and consideration they can get from BP, citizens, the federal and state governments and even the IRS.
BILL CHERRY, REALTORS
DALLAS - PARK CITIES
Our 45th Year
214 503-8563
I would also think that they should be able to deduct their losses but income is income.
I agree with John Franc. Surely things will come out pretty even at tax time when they report their losses.
At First I was outraged, Then I read Johns comment and have to agree. If they get the income then ....