We were partners in an LLC that closed last year. This year we paid a settlement to the landlord for breaking the lease (we had signed a personal guarantee for the lease). There were legal fees related to this settlement. Also, we paid our partner's share of the settlement and he is repaying us monthly with a personal loan.
How do we deduct the settlement amount and associated legal fees and how do we report the principal and interest repaid to us by the other partner?
