You need to report the settlement as income on your tax return.
If you had damages to non-business property, the only way to deduct the value of it would be to report it as a casualty loss. It may not benefit you though, as it is an itemized deduction, so if you take the standard deduction, you will get no benefit from it.
You can use these menu tabs in TurboTax to record a casualty loss:
- Deductions and credits
- Other Deductions and Credits
- Casualties and Thefts
**Mark the post that answers your question by clicking on "Mark as Best Answer"
In addition to response by ThomasM125, you can follow the instructions below to enter your 1099-MISC:
- Open or continue your return, if you're not already in it.
- Search for 1099-misc and select the Jump-to link.
- Click Add a 1099-MISC.
- Enter the data as shown on your form.
- Describe the reason for this 1099-MISC.
- Answer This Money Was From a Lawsuit Settlement on the screen Does one of these uncommon situations apply?
- Answer No, it was not back wages for the next question.
- Answer No for the question Did you have another 1099-MISC?
- Your 1099-MISC will flow to Other Income.
Thanks for your reply. I am working under the assumption based on my research that under the construction easement agreement payment of severance damages to land retained by the owner can be offset against the basis of the land and is not taxable income. I do have to report it received but it is difficult to determine where to offset the income with an expense/deduction. Seems too complicated a situation to file myself. I may try a different method to file