setagw <setagw[at]juno.com> wrote:

- quote -

Would that be considered a reduction in basis (non-taxable)?

- quote -

When you have the work done, it will add to the basis.

Seth

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"setagw" <setagw[at]juno.com> wrote

- quote -

That amount should be to compensate you for damages to your
house, as such you should be reducing your cost basis in the
property. Later, when the repairs are made, you increase
your basis.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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"setagw" <setagw[at]juno.com> wrote:

- quote -

You'd have to show a tax lawyer both the complaint and the
settlement agreement or judgment. But it could well be that
the settlement you received represented the diminished value
of the home. In that case it should not be taxable, but
would reduce your basis in the property.

Stu

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I received a settlement in 2006 for structural defects in a
home I purchased a few years ago. I did not have any work
done yet and did receive a 1099 misc form from the lawyer.
The 15k is listed under "other income". It is showing up on
line 21 of the 1040 as "prizes/awards". Is this taxable,
even tho I do plan to have the work done?

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