I realize this isn't a common situation, but nonetheless the IRS allows it (re: IRC S62(a)(21) below), but TT doesn't support it.
How do I enter the legal fees associated with an Employment Related Age Discrimination Lawsuit settlement that was included in a 1099-MISC so that:
- a) it can be entered as an above the line "other adjustment" on Form 1040 Schedule 1, line Line 24z
- b) it is included in Schedule 1, line 25,
- c) it is reflected in the "Adjustments to Income" total on Schedule 1, line 26?
I.R.C. § 62(a)(20) Costs Involving Discrimination Suits, Etc. —
Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any action involving a claim of unlawful discrimination (as defined in subsection (e)) or a claim of a violation of subchapter III of chapter 37 of title 31, United States Code, or a claim made under section 1862(b)(3)(A) of the Social Security Act (42 U.S.C. 1395y(b)(3)(A)). The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer's gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim.
Internal Revenue Code Section 62(a)(20)
...
Adjusted gross income defined.
(20) Costs involving discrimination suits, etc. Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any action involving a claim of unlawful discrimination (as defined in subsection (e)) or a claim of a violation of subchapter III of chapter 37 of title 31, United States Code or a claim made under section 1862(b)(3)(A) of the Social Security Act (42 U.S.C. 1395y(b)(3)(A)). The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer's gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim.
