Regarding the question of if the Norcold settlement payment is taxable income, the answer depends on whether or not you have been claiming deductions for expenses with respect to the use of the motor home.
If you are deducting any operating costs (i.e. depreciation, repairs, etc.) and use the motorhome as a business asset with deductible expense items, then the settlement payment may represent taxable income to be included in the motor home income/loss calculation. You should discuss the issue with your tax advisor to ensure the proper treatment is determined.
If you use your motor home solely for personal use, i.e. no depreciation deduction for business use, no operational deductible expenses, (do not take into account if you are currently deducting interest on a loan secured by the motorhome if eligible to do so as a first or second home mortgage deduction) then the settlement recovery should generally not be treated as an item of taxable income and does not need to be reported as income by an individual.
If in doubt, talk with your tax advisor.
2006 Winnebago Journey 36G