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Client's LLC received a Mutually Agreed Settelment with income shown on line 3 of a 1099 -MISC

Poltax75
Level 3

My Client's LLC  received a mutually agreed court settlement for damages to property, mostly research results and documents, used in his business.

He received  A 1099-MISC with the amount shown in line 3 (Other Income) $70k

He also has legal fees which were not covered by the settlement. This his specifically stated in the settlement

What is the best way to report this on Schedule C.

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1 Best Answer

Accepted Solutions
sjrcpa
Level 15

The $70K is reported as part of the income.

The legal fees are deducted on the legal and professional services line.

The more I know, the more I don't know.

View solution in original post

4 Comments 4
sjrcpa
Level 15

The $70K is reported as part of the income.

The legal fees are deducted on the legal and professional services line.

The more I know, the more I don't know.
IRonMaN
Level 15

As they say on Family Feud - good answer.


Slava Ukraini!
Poltax75
Level 3

Thank you

sjrcpa
Level 15

You're welcome.

The more I know, the more I don't know.