One point of clarification - I took a more careful look at the 1099. He sold 20k, but there was only a 41 dollar gain plus 2.1k in dividends. So I'm thinking he is actually under the 4,300 gross. What I'm trying to figure out how is how exactly they define gross income. Based on my new discovery of the 1099, would his gross income fall under 4,300? And should I count the proceeds from his settlement (definitely non-taxable) as part of his gross?
