I purchased a property in 2004. Home was built in 2000; I purchased it from the original owner as an investment property.
There were some issues with the way the home was built. A suit against the builder was finally settled, and I received a check for several thousand.
Is this taxable income? if so, how do I report it?
Or perhaps this just changes the basis of the property? If so, how do I report it?
Thanks in advance
I think you need to review IRS publications on casualty losses and gains, court settlements and awards to answer this question.