1099-MISC Box 3, Not Self Employed

Forum|Forum|4 years ago
April 12, 2022
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I received rental income for an investment property that I report on my schedule E; however, since the payer did not report it in Box #1 Rents in the 1099-MISC that I received, the software is treating it as self employed income since they marked it as Box #3 Other income. This was received due to the fact that my tenant stopped paying rent and the city of Los Angeles stepped in and covered their rent. They refuse to correct the 1099 to Box 1, even though, going forward the state of California is covering this and has provided the same 10990-Misc for future months and has marked box #1 rent.

Los Angeles is refusing to comply with how California does it so the rent LA provided was for Jan-Aug; however, the rent provided by CA was from Sept-Dec. I want to know if there is a proper way I can list Jan-Aug rent marked as "Other Income" but not get dinged as self employed income. I can't carry it over into my schedule E since it's not marked as Box 1, Rent

TurboTax Home & Biz Windows

PattiF

Do not enter Form 1099-MISC at all, just report the total amount as rental income. The IRS is more concerned that all of your income be reported versus having it entered on Form 1099-MISC.

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LeadRealty0308Author

Thank you for your reply but wouldn't that automatically trigger an audit since they will have a 1099-Misc on their end that won't show a matching one reported on mine? I've actually had an accountant tell me they had a year long audit fight by ignoring the 1099-Misc and reporting it as rental income.

I don't want to unnecessarily get triggered into their database. Rather, shouldn't I report it as 1099Misc; however, mark that it's an "uncommon situation" - None of these apply, mark that it didn't involve work, I only got it for 2021 and I didn't involve an intent to earn money?

JillS56

The 1099-MISC is no longer used to report non-employee wages/income. There is a new form that reports what use to be reported in Box 7 of the 1099-MISC. Take another look at your return, Box 3 of the 1099-MISC would not be treating the income as self-employment. Self-employment income or non-employee income is now reported on the new form 1099-NEC.

If it is calculating self-employment then try deleting the 1099-MISC and re-enter it. Box 3 of 1099-MISC income should end up on Schedule 1, Line 8z Other Income.