Mike20878 wrote:

- quote -

Yep, it sure should. Good catch.

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Bill Brown" <brow...[at]longwood.edu> wrote:
- quote -

Shouldn't that be net of the returned deposit?

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Bill wrote:

- quote -

Report the entire amount of the settlement on line 21, Other
Income, of Form 1040. Report the legal fees in the
Miscellaneous section of Schedule A (and subtract 2% of AGI
from the total of that section).

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

This year we signed a contract with a deposit to purchase
real estate. We then found out the owner sold the real estate
to another person. We settled the suit through arbitration for
which we received $430,000. We had $28,000 in legal expenses.
We would like to know what our options are for reporting this
income.

Thanks,
Bill

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >