@rbyu
You really haven’t given enough information, and this comment is more confusing than ever. What is “he got the better part $$ house” supposed to mean?
In general, you can deduct settlement costs as a business expense if they arise from your business. If you want a more specific answer, we need to know a lot more about your situation.
What exactly was the nature of your business? How did you earn money, and how is it reported on prior tax returns? How long were you in business together? What exactly was the legal complaint for which you brought suit? How much did you pay in settlement costs and what did you get in return?
