Legal settlement

Technical topics regarding tax preparation.
#1
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Client received a 1099-MISC reporting a $2,500 settlement from a class action suit in box 3. I've determined that it's not taxable. What's the best way of showing this on the tax return.
 

#2
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21-Apr-2014 11:29am
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California
As long as your sure it is not taxable my suggestion would then to be report this as "Other income" on Schedule 1, Part I, Additional Income, line 8z - Other income and then back it out on Schedule 1, Part II, Adjustments to Income, line 24z - Other adjustments with and explanation.
 


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