You'll need to sign in or create an account to connect with an expert.
There are two methods, neither one is perfect.
One, just leave it off. The IRS will definitely send a letter saying "you forgot to report some income" and you would answer with a letter explaining that this was a settlement for construction damages, and reduces your basis in the home but is not taxable.
Or two, enter the 1099-MISC (make sure that the money is in box 3, not box 7, and you indicate this is a settlement so you don't get taxed for self-employment as well. then go back into other miscellaneous income an enter an item for "adjustment for non-taxable damage award" of negative or minus $9000. That will offset the income. That should also stop you getting the letter that says "you forgot to report a 1099-MISC form" but it doesn't necessarily mean you won't get a different letter asking you to explain the negative adjustment.
Did this work?
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
bookwor90
Returning Member
Amiller1
Level 2
tabularasasm
Returning Member
peggymoak
New Member
v0lv0drvr
Level 1