How do I enter a 1099-Misc when only a portion of it is taxable & the remaining amount is an IRA restorative payment? I received a settlement to restore losses to an IRA. The 1099-Misc from the attorney was for the entire settlement amount of $22,000. Of that amount, the legal fees were $7,000 which the attorney took out of the settlement. How do I enter this on my tax form so that I am only paying taxes on the legal fees of $7,000? The remaining amount was sent directly to the IRA custodian to restore some of the losses.
