Legal Funding Impacts Taxes, On Funding & Later Settlement

But apart from sales and loans, some funders are willing to use an unusual structure called a prepaid forward contract. It is a sale, so you might assume you have to report the up-front money (the sale proceeds) immediately as income. However, this is a sale contract with an unclear final sales price, usually because the formula for payment depends heavily on the time when the case proceeds come in.
— Read on–later-settlement/

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