QUESTION
How do I allocate a lawsuit settlement 1099 to those receiving the money?
Asked on May 28th, 2013 on Taxation - Missouri
More details to this question:
I received a lawsuit settlement that needs to be split among 3 people. However, I will receive the 1099 for the full amount. How do I document that the others received some of the money on my 2013 return?
1 ANSWER
Robert Barnhill III
First report the entire amount from the 1099 on your 1040. Then subtract the amounts paid to the other parties including their tax identification numbers and addresses. Include a notation describing why you subtracted out the amounts. This way you will only pay taxes on the money you collected but you will properly report what was included on the 1099.
Answered on May 28th, 2013 at 6:38 PM