I realize this isn't a common situation, but nonetheless the IRS allows it (re: IRC S62(a)(21) below), but TT doesn't support it.
How do I enter the legal fees associated with an Employment Related Age Discrimination Lawsuit settlement that was included in a 1099-MISC so that:
I.R.C. § 62(a)(20) Costs Involving Discrimination Suits, Etc. —
Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any action involving a claim of unlawful discrimination (as defined in subsection (e)) or a claim of a violation of subchapter III of chapter 37 of title 31, United States Code, or a claim made under section 1862(b)(3)(A) of the Social Security Act (42 U.S.C. 1395y(b)(3)(A)). The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer's gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim.
Internal Revenue Code Section 62(a)(20)
...
Adjusted gross income defined.
(20) Costs involving discrimination suits, etc. Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any action involving a claim of unlawful discrimination (as defined in subsection (e)) or a claim of a violation of subchapter III of chapter 37 of title 31, United States Code or a claim made under section 1862(b)(3)(A) of the Social Security Act (42 U.S.C. 1395y(b)(3)(A)). The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer's gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim.
First, you would enter the 1099-MISC for the full amount of the settlement.
You may deduct the attorney's fees and create an 'above the line deduction' by following these steps:
The entry will be reported:
First, you would enter the 1099-MISC for the full amount of the settlement.
You may deduct the attorney's fees and create an 'above the line deduction' by following these steps:
The entry will be reported:
Thanks for the quick reply!
While entering the attorney fees as a negative value under "Other Taxable Income" made the necessary adjustment, I must say that having to enter a valid deduction this way wasn't at all 'intuit'-ive.
Thanks again for the quick response and detailed assistance.