@Mike9241 wrote:
no, you can't claim it. it's his estate that is liable. if his estate was large enough to require the filing of an estate tax return - form 706 (United States Estate Tax Return) this could be claimed as a deduction on it. personal casualty losses are no longer deductible on income tax returns so the settlement can not be claimed on form 1041 (U.S. Income Tax Return for Estates and Trusts)
Personal legal settlements, fines and penalties that the taxpayer pays are never tax deductible, they aren't casualty or theft losses.
Settlements are sometimes deductible as business expenses if the situation that caused the settlement was part of a business activity (like a slip and fall accident in a store). In this case it would be handled on the business return, not the personal or estate return.
