After 8 long years I settled a lawsuit against my HOA insurance company, in which I received no monetary gain except for reimbursement of legal expenses. The intent of the lawsuit, was to remove a stormwater drain, that was built illegally by the HOA contractor on my property without my consent or consultation, without township permit, nor adherence to township ordinances. Additionally, the lawsuit was intended to restore my land to its original condition or provide a stormwater solution as dictated by the township in its permitting process. Further, the HOA's illegal drain changed the flow of stormwater and directed the flow toward my dwelling, which is not permitted by covenants attached to my deed. Additonally, the covenants in my deed spell out that I can recover legal expenses, if I win a legal dispute with the HOA
I received a 1099-MISC, with only one box 10 filled in(gross paid to an attorney) from the HOA 's insurance company. To get the settlement money, I had to fill out IRS w9 form. I have all the records which show legal expenses paid by me. My legal expenses exceeded the settlement sum by a significant amount.
How do I report this in turbo tax without adding this settlement sum to my AGI as additonal income?
Can I just exclude the 1099-MISC from any turbo tax calculations or IRS forms, but attach the 1099-MISC and provide the explanation above?
What must I report, and what IRS forms are required to be submitted with my tax filing?
