Structured Settlement Transfers

The Victims of Terrorism Tax Relief Act of 2001 includes a section entitled "Treatment of Certain Structured Settlement Payments" which added new Section 5891 "Structured Settlement Factoring Transactions" to Subtitle E of the Internal Revenue Code.   IRC Section 5891(c)(2) defines   structured settlement factoring as a transfer of structured settlement payment rights (including portions of structured settlement payments) made for consideration by means of sale, assignment, pledge, or other form of encumbrance or alienation for consideration.

Chapter 8A of "Structured Settlements and Periodic Payment Judgments" includes a detailed analysis of structured settlement transfers.  An article analyzing the impact of IRC Section 5891 which is excerpted from "Structured Settlements and Periodic Payment Judgments" appears on S2KM's website.  For additional information about structured settlement annuities, see "Structured Settlement Definition", "Introduction to Annuities" and "Advantages and Disadvantages of Annuities".