Sorry, you don't get any adjustments for legal fees or other costs, unless this is income-producing property (then you can deduct the fees as a legal expense).
The settlement is not taxable income now, but you reduce your cost basis by $30,800 when you sell, which will reduce your taxable capital gains. You also can't claim a cost basis increase for the money you paid to improve the upstairs flooring, since those improvments were not made to your property.
