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My wife and I are receiving a settlement from two mortgage

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companies because of wrongdoing on...
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: 1 year ago.Category: Tax
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8/26/2016
Tax Professional: emc011075, Tax adviser replied 1 year ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,242
Experience: IRS licensed Enrolled Agent and tax instructor
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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.

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Tax Professional: emc011075, Tax adviser replied 1 year ago

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