Based on what you have said it sounds like your landlord has created a fictitious deduction for his taxes based on what they feel like you owe.
Your best solution given the circumstances is to create a schedule C, enter the $112K as income, then create an expense for "incorrect 1099" for $112K as well and then send it in.
You may receive a letter from the IRS about it so be prepared for that - write out an explanation of what occurred and gather and make copies of the documents from the court that show the settlement agreement so that you'll be prepared to send them in quickly if a letter arrives.
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