Most lawsuit/settlement money is taxable income. What you describe is not an exception. The money is taxable income and is reported as "other income" on line 8z of Schedule 1. Enter in TurboTax at:
Federal Taxes Tab
Wages and income
Scroll down to:
--less common income
---Misc Income, 1099-A, 1099-C..... (Press start)
----On the next screen, select Other reportable income
You add the money you spend on fixing things to your cost basis, in the home.
