IRS Income Reporting from Wage Garnishment

[Oliver Roberts]

We were awarded a court judgment last year and were able to slowly collect with wage garnishment through the ex-tenant's employer. The employer reported it as a non-employee compensation (Box 7) on 1099-MISC. The problem that we recently found, was the Turbo Tax Premier version that we used, only allowed a small amount of expense deduction (up to $100) before automatically adding the rest to our income.

Reading up on the Turbo Tax/Intuit sites, they said the next version up Home and Business provided more expense deductions through Schedule C. We would then be able to deduct the true repair expenses if we were using the Home and Business version. How am I supposed to separate and report the back rents portion of the judgment to the IRS?