Question

A relative builds houses and sells them. I invested $10K in one of the houses and received $11.3K after sale. He provided me with a 1099Misc, is that the correct form?

Forum|Forum|6 years ago
February 25, 2020
1 reply
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Wondering if this is the correct form as it triggers the self-employment questions, rather than any investment income questions. The income is also being taxed at a rate much higher than my marginal income tax bracket.

TurboTax Premier Online

Carl11_2

Employee

No. It is not the correct form. THe 1099-MISC with an amount in box 3 is only issued to you if you "EARNED" the income reported in box 3. You didn't "do" anything to earn it. It's investment income. That's it. Period. End of Story.

But this will be easy to deal with actually, provided box 3 does "NOT" include your initial $10K investment in the amount reported in that box. Does it?