- 4 - interest. On October 31, 1990, the parties had filed a stipulation of dismissal with the trial court. The judgment entered on December 5, 1989, was not an enforceable final judgment under Rhode Island law because it was voided by the parties' settlement and the stipulation of dismissal. Aetna paid $142,000 to petitioner and Coughlin on November 2, 1990. Aetna did not issue a Form 1099 to petitioner or respondent regarding the payment. Coughlin paid himself $55,389 for legal fees and costs and paid petitioner $86,610.41. D. Petitioner's 1990 Tax Return and Respondent's Determination Petitioner timely filed his 1990 Federal income tax return. He did not report any of the $142,000 and did not deduct any legal fees or costs related to the lawsuit. Respondent issued a notice of deficiency in which respondent determined that petitioner had failed to report interest income of $67,0001 and had an income tax deficiency of $12,024. Respondent allowed petitioner to deduct legal fees and costs of 1 Respondent concedes that prejudgment interest was only $64,510.60.Page: Previous 1 2 3 4 5 6 Next
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