The "gross proceeds paid to an attorney" (box 14) on 2019 Form 1099 I think are for payments of things like legal settlements that the attorney receives, rather than professional services fees (not positive on this).Also, whether you receive fees for professional services from US based or foreign based clients doesn't exempt you from the tax.

I made a payment agreement with the HOA and it was for roughly $4792.00 on a settlement. 

They're going to then ask you for a copy of the note, the mortgage history, the settlement sheet from when you bought it, lease for your new tenant and a list of improvements. 

I recognize that things may be different in Louisville, but here in Baltimore (and most other jurisdictions that I am aware of) the past owner's water bill needs to be paid at settlement by the seller in order for your deed to be recorded.Could be a very honest mistake or the result of delays in water bills being updated, but either way it sounds like something the title company that handled your purchase should eat. 

The prepaid’s in the settlement statement/closing disclosure that are escrowed are not deductible.

Make sure you check your settlement statement for these and the security deposits.

Make sure security deposits and pro-rated rents transfer at closing, either on the settlement statement or as a separate transaction at closing.

Through a legal settlement, my husband and I are expecting to receive about a $100k in another month, maybe more.

Because when you give them the "right" to do so, including a time frame within which the settlement date can be considerably delayed, tenants who actually have zero intention of purchasing can take advantage of the situation and squeeze the seller out of a portion of their sales proceeds through a negotiated waiver or assignment of their "rights". 

She is correct, you execute a quitclaim deed, then she can refinance in her name, her lender can explain that and they may have you sign the deed at the refi settlement.