I recently sold my house and had a qualified gain of ~$350,000. Due to certain circumstances I may receive an additional $150,000 from a settlement from the realtor involved with the transaction due to a breach of fiduciary duty, specifically pertaining to the sale of my home. This money will likely be paid to me from his insurance company. First, does anyone know how this settlement amount will be reported to me? if it will be considered taxable? or can I add this amount to the amount I am considering as gain from the sale of my home, ie; report a total gain of $500,000. Any thoughts are welcome.
