Client has a home office in a room on the second story of his home. It’s at the front of the house and overlooks the front walkway. The home office is about 10% of the home’s total heated square footage. Client was cleaning his office windows about 6-months ago. Instead of climbing up a ladder to do the exterior cleaning, he just leaned his body out of the window and hung on tight. But he lost his grip and fell. He happened to land on the mailman. The mailman was slightly injured and incurred some medical bills. In case it matters, the mailman’s delivery that day involved business mail only. The mailman definitely saw the client cleaning the windows, but he proceeded to walk underneath him to deliver the mail. Client says that the mailman even made an effort to catch him.
To make a long story short, the client wrote a check out of his business account to reimburse the mailman for his medical bills.
We’re preparing the client’s 2020 Schedule C bookkeeping and are trying to figure out how to classify this payment.
Any help with this situation would be appreciated. I’m sure some of you have fallen into something like this before.