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I invested $200,000 with a money manager. He invested my money

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I invested $200,000 with a...
I invested $200,000 with a money manager. He invested my money in a high risk that was not appropriate for me. In a period of six months, I was down 33%. I took my money out of his account and sued him for damages. His company settled with my lawyer for $32,000 in 2015. My loss went on my 2014 tax return. The check was made out and sent to my attorney. They sent the 1099 form to me in my name. My portion of the return was only $20,000. Am I responsible for paying taxes on recouping this money I lost?
Submitted: 1 year ago.Category: Tax
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Answered in 3 minutes by:
5/1/2016
Tax Professional: Lev, Tax Advisor replied 1 year ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,663
Experience: Taxes, Immigration, Labor Relations
Verified
Yes - that settlement is YOUR income - and included into your tax return.They correctly reported it on 10999misc form.Separately - you may deduct attorney fees and other legal expenses as related to taxable income.Let me know if you need any help with reporting.
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Tax Professional: Lev, Tax Advisor replied 1 year ago
Generally - compensation for damages would be taxable income.That is regardless if the payer reported or not that amount on 1099misc form.However - if settlement is taxable - you would be able to deduct legal expenses (as related to taxable income)A part of the compensation which represents return of your money would not be taxable.For instance - if you are refunded any fees you previously paid (and not deducted) - that part of the settlement is not taxable.To determine - we need to verify your settlement agreement - and see exact amounts of compensation for each item - and each item is determined separately.Let me know if you need any help with reporting..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.
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Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,663
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