[Always Right]

I'm not a lawyer, but I thought it wasn't.

The government taxes anything. Now the portion that is reimbursing actual expenses is probably not taxable, but I would bet our government would not pass up the opportunity to tax these types of judgements. But I am no expert in this area, just guessing based on the way the government treats other income.

[Iwo Jima]

Recovery of things like pain & suffering, mental anguish, physical impairment, and disfigurement are not taxable. This is because you had a normal body/mind to start with and the government doesn't tax you on that -- yet (:-^). If someone takes those things away from you and then has to pay damages for your loss, you haven't "gained" anything.

Recovery on economic damages such as lost wages/wage earning capacity is taxed because you would have been taxed on those sums had they been earned.