What are the tax rules on money paid out to a very problematic roommate who has finally agreed to vacate for a $5000 payout? What taxes do we owe?

I've consulted with the rent board in my city and I'm following the laws around tenant buyouts. My concern is that I am paying someone for a "service" and it is more than $600. I would like to report this to the IRS. I would like him to pay taxes on the money I pay him. Is this a capital gain? Is this a winning? What category does this fall into?