Settled outside of court for a settlement against me. How to claim on taxes?

[katie-hanson79]

The original claim was for a fire at the apartment I had lived at.  No charges were ever brought up, but it was found that the fire started on my porch (still unknown how it started).  I had a claim against me for over $550,000.  I got a lawyer and we settled for $3,000.  I have received no tax forms from the collection agency.  How do I handle this situation on my taxes?

[CarolynM · Accepted solution]

You don't report anything. This is a personal expense that will not be reported on your tax return.