You need to report the settlement as income on your tax return.
If you had damages to non-business property, the only way to deduct the value of it would be to report it as a casualty loss. It may not benefit you though, as it is an itemized deduction, so if you take the standard deduction, you will get no benefit from it.
You can use these menu tabs in TurboTax to record a casualty loss:
- Deductions and credits
- Other Deductions and Credits
- Casualties and Thefts
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