Enter the 1099 exactly as you received it. There should be a list of special circumstances in the box you can check for “lawsuit proceeds”.
If you with a plaintive, then the entire settlement is taxable to you, even if some of it went to attorney fees. There used to be a possibility of deducting the attorney fees (although the exact deduction depended on other factors) but that was eliminated in the 2018 tax reform act when the standard deduction was doubled.
attorney fees for lawsuits involving unlawful discrimination are still deductible, and that requires a special procedure. Any other attorney fees or expenses that you pay to settle a personal lawsuit cannot be deducted from your winnings.
