June 18, 2010

Senate Adopts Proposal to Eliminate Tax Deduction for Punitive Damages

A few months ago we blogged about a proposed bill that would prevent defendants from treating payments of punitive damages as tax-deductible business expenses. The Senate adopted that proposal yesterday, stating that the revenues from the proposal would be used to fund a 90-day extension of the home buyer's tax credit.

Hat tip: TaxProf Blog.

UPDATE (6/18/10 at 2:07 pm): The National Law Journal has more on this story. The NLJ story clarifies that the Senate adopted this proposal as an amendment to the American Jobs and Closing Tax Loopholes Act of 2010, which was approved by the House last month. The Senate has not yet acted on the full act.