Lawsuit Settlement
Hello! I will be receiving a $10k settlement for punitive damages and emotional distress. I know these settlements are fully taxable, including the contingent fee portion that goes to my attorney (a whopping 45%!). However, my attorney recently told me that she will receive a $10k 1099 from the defendant and I will receive a $10k 1099 as well. In addition, she will 1099 me for the portion she pays me out of her $10k, so another 1099 for $5,500. Meanwhile, I received only $5,500. First, is this even correct and second, how do I offset this on my taxes? She said talk to a CPA. I am freaking out. Please help. Thank you!
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