I personally received a 1099-Misc for a settlement income with a creditor that was incorrectly reporting information on my credit report. The settlement read in part:
Bank agrees to pay Customer $xxx in full and final settlement of the parties' differences that have arisen in connection with account number yyy and the suit. The settlement check shall be made payable to the Customer's attorney of record, zzz. No representations regarding the tax consequences of this settlement have been made by either party.
All of the settlement funds went to my attorney. Where/how do I show this reported income and the fact that I got none of it on my personal tax return? Should I have issued a 1099 to my attorney for the same amount? Do 1099 requirements apply to individuals paying their attorney for a personal matter?
This is not a dup of this question because that question is for a business receiving the 1099 and this one is for an indiviual. Also, that question does not address where to report the income and where to report the deduction.
