Question

1099-misc

Forum|Forum|4 years ago
February 13, 2022
1 reply
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I received a 1099-misc 2021 for closure of a trust. I did not receive these funds until the end of January 2022. I believe this 1099 is in error and should be reported for 2022. Should I contact then sender and ask them to correct this.

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JohnB5677

Yes, that would be the most efficient way to do it, but it's possible that they will not be willing to do it for two reasons.

They mailed the check before 12/31/2021 and it is correctly in 2021 for them.
They are on an accrual accounting basis, and again the 1099-MISC is correct for them.

If they do it the case is closed and you report the income in the year it arrived, but if it doesn't get changed, you will have to make a decision.

You can choose to not post it to your 2021 tax return.
- This is correct based on the date you received it.
- You will probably get a CP2000 Tax Notice
  - The IRS will state that you missed that income and you owe a tax.
  - You can correctly state that it wasn't received until 2022
  - You probably will succeed with that endeavor, but it's no fun to deal with the IRS
The alternative is to simply enter it for 2021.

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M

msch532115Author

John,

I have a letter noting the check was enclosed with an accounting on the trust disbursement, dated January 22. 2022. This was a small trust that was finally dissolved. I would suspect it is not on accrual accounting basis, I would suspect they had everything to go for taxes and didn't realize their mistake.

Thanks,

msch532115