You've really not provided enough information here to allow anyone to answer with a "yes" or "no."
If you had been paying "her" properly all along, such that the lawsuit wasn't necessary if the first place, would the amounts be deductible to you? Like maybe salary or wages against business income? If so then the amounts you are paying her probably are deductible now and the amounts would be some sort of "income" to "her."
Tom Young
You've really not provided enough information here to allow anyone to answer with a "yes" or "no."
If you had been paying "her" properly all along, such that the lawsuit wasn't necessary if the first place, would the amounts be deductible to you? Like maybe salary or wages against business income? If so then the amounts you are paying her probably are deductible now and the amounts would be some sort of "income" to "her."
Tom Young
Thanks Tom. It was a personal lawsuit to recover monies from my late fathers estate. She authorized the funds to be moved to myself and sister through her POA. (Don't ask, it was really screwed up and we got lousy estate advice.) She came back 6 months later after a couple of rough surgeries and suddenly wanted the money back. Calling us all sorts of bad names. Three years later and we reached a settlement. No is it not related to job or employment, so I am gathering all this money I am paying her is just gone.
Settlement payments of personal (non-business) lawsuits are not deductible. The defendant must issue a 1099 to the plaintiff if the settlement is taxable. (Ask your attorney if the settlement is taxable.) If the defendant had liability insurance coverage, the insurer sometimes takes care of the 1099.