Is money I recover from suing a seller taxable to me?

It depends on what the payment is actually characterized as, which is a federal income tax question governed by the Income Tax Act rather than something the purchase agreement itself controls. An indemnity payment that effectively corrects the price you paid for something — for example, a payment tied to a misrepresented share value in a share sale — is often treated as reducing your cost of what you purchased, rather than as separate taxable income in the year you receive it.

Damages that instead replace income the business would have earned, or compensate for a different kind of loss entirely, can be treated quite differently for tax purposes. This determination is genuinely fact-specific, turning on exactly what the payment is meant to compensate and how the settlement or judgment characterizes it, so it's worth confirming with an accountant before assuming either way — particularly for a recovery large enough that the tax treatment meaningfully affects what you actually keep. Don't rely on a general assumption about damages awards in other contexts to answer this for your specific claim.