I received proceeds from a lawsuit for damage done to my property. I used a good amount of the proceeds to repair my property and a good chunk for attorney's fees. Is the entire amount taxable to me? Can I deduct the cost of the repairs? Can I deduct my attorney's fees?
The taxable amounts received will depend on how the lawsuit proceeds were labeled. If the proceeds were given solely to compensate you for property damage, that is not taxable income and you will enter the amount on line 21 of your return and then take it out as a negative to show the IRS. If part was DESIGNATED as attorneys fees those are taxable
To enter the proceeds, if they are taxable, you will enter them in the Miscellaneous income section.
My tenant damaged that property( flooded the basement by leaving water running in upstairs bathroom). My insurance company reimbursed for the damage. Should include the reimbursement amount as income? Should I report the repairs?