If we have a bona fide settlement to compensate a property owner for subsidence, is the settlement amount subject to 1099 reporting?


See Demystifying Form 1099 for Legal Settlements. Typically a settlement for property damage that is “make whole” is not reportable; only an amount that exceeds the value of the property value would be taxable.  Also see IRS Publication 525, page 30.

We trust this is helpful. The Ask the Expert team does not include attorneys, and we suggest you consult a tax attorney for tax matters.

Have more questions? Submit a request