The best way to report this are by using the steps provided by our wonderful Tax Expert @DMarkM1. It will include and subtract the income appropriately as you need. As long as you have your backup documents that's what really matters.
- Scroll down the page to the last section titled: Less common Income and click show more;
- Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;
- Scroll down to the last option titled Other reportable income and select start or edit;
- When it asks, "Any other reportable income?" say yes then you will make one entry
- Enter this description: Discrimination Legal Fees excludable income and enter amount as a Negative (-) number
@jwingbar
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