@BrandonSF wrote:
I just spoke with the lawfirm and they are limited on what tax info they can give, but they said the lawsuit would be under the catagory of FDRA - are you familiar with this? I suggested it seems more like an employee lawsuit but they couldnt confirm or not confirm this.
For your taxes, this is the ultimate point.
1. If this was a personal lawsuit, then the gross amount is taxable and there is no deduction for amounts paid to attorneys.
2. If this was a lawsuit in connection with your self-employment, then you report the entire gross amount as business income and you deduct the legal fees as business expenses. The net you keep is subject to income tax and self-employment tax because it is business income.
