You will report the court garnish wages for back rent owed as Other Income on line 8 of Schedule 1.
It is not considered business/rental income because you no longer own the property.
As per this TurboTax Help Article here are the steps to enter it:
- Open or continue your return.
- Search for lawsuit settlement using the magnifying glass at the top right corner of the page and select the Jump to link.
- Answer Yes to the question Any Other Taxable Income?
- If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item.
- Enter a brief description and the amount you received and select Continue.
