How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask emc011075 Your Own Question
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2924
Experience:  IRS licensed Enrolled Agent and tax instructor
62958156
Type Your Tax Question Here...
emc011075 is online now
A new question is answered every 9 seconds

My wife and I are receiving a settlement from two mortgage

Customer Question

My wife and I are receiving a settlement from two mortgage companies because of wrongdoing on their part. They have agreed to settle out of court and have have offered between the two to $51, 750 after our attorneys fee we will have $30, 750 - that is what we will actually receive. What do we need to know about any applicable taxes for this amount?
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: This does not involve a physical injury.
Submitted: 10 months ago.
Category: Tax
Expert:  emc011075 replied 10 months ago.

Hi. My name is ***** ***** I will be happy to report.

You will receive 1099 for the entire amount (that's how it is usually reported). You will claim it on line 21 as other income and the attorney fees can be deducted on Schedule A as part of itemized deduction with certain limitations. To avoid a huge tax bill you can make an estimated payment.

Expert:  emc011075 replied 9 months ago.

Do you have any questions? Is there anything else I can help you with today?