What is the amount to put in the box? As I said before, this is a $15K settlement of which $10K goes to the law firm and $5K goes to us. In that the $15K was the current Kelly Blue book for the car at the time of the suit which is also what we got as a trade-in value. Various "lemon law" articles said that there is no tax unless there are punitive damages, i.e. like "pain and suffering" which would presumably exceed the purchase price. GM just bought back what they sold us in 2016 for $27K+. I was told the "basis" for the expense is the cost of the car when we bought it. Hence, $27K is bigger than $15K...
I currently have the 1099-MISC entered at this point with the $15K from box 10. Does that get removed or, as per one person's suggestion, box 8z of the Sched 1 gets a -$15K to "adjust it" to $0, i.e. no tax liability? After all, the $10K to the firm is their income and is taxable to them.
It all comes down to one thing and the method to enter it. Given all the circumstances I have reported in this thread, what if any is my tax liability? And where/how do I enter that?
