Typically, a lawsuit settlement payment reported on a 1099-MISC amount is for attorney's fees, punitive damages, emotional distress, other physical injuries, and prejudgement interest. Depending on the nature of this payment, it may be taxable.
This IRS Publication 4345 on Settlements Taxability has the specifics on what portion of a lawsuit s.... Use it as a guide for how to answer TurboTax questions about your wife's 1099-MISC.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
