Form 1099PATR

[Terry D EA]

Client received this form and doesn't know why. There is an amount in box 5 which has to be reported. He is not a farmer so I say Sch F is out, no business so Sch C is out, so I looked at form 4835. Where do you put this information? Out of my confusion, I am thinking that if I put the amount on line 21 other income, it has the same effect. However, I do not want the IRS to look for the form where this is supposed to be and issue a CP2000. Help please

[Roberts]

From Intuit Community:

Box 5. Shows amounts you received when you redeemed nonqualified written notices of allocation and nonqualified per-unit retain allocations. Because these were not taxable when issued to you, you must report the redemption as ordinary income to the extent of the stated dollar value.

From a different website:

Box 5 – Redemption of Nonqualified Notices and Per Unit Retain Allocations: Shows the amount the recipient got when he or she redeemed nonqualified written notices of allocation and nonqualified per-unit retain allocations. If you receive a non-qualified patronage dividend, the cash received is taxable income. If you receive a nonqualified notice of allocation, retain the notice in your permanent records, but no tax impact occurs at this time, only when cash is received upon later redemption.

IMO you have to figure out (guess) what it is that the money is in relation.

Have they heard of the company, have they used their services, if so how often and how long? How much money are you talking? Doesn't sound like this would automatically generate a CP2000 because a form wasn't generated since it could go a few different places.

edit: my software says you MUST have a C,F or 4835 started before you can enter the 1099. If you are going to enter it, I'd start up a 4835 and then see where the software puts it. If your software doesn't have a 1099 PATR entry form, let me know and I'll run one through mine tomorrow.

[Terry D EA]

My software doesn't have a 1099 PATR entry form. I did use the 4835 and the amount which is 109.00 was put on the same line as a Sch E would be. When you open the 4835 it is even more confusing as to which entry you should use. Try it and see what you come up with.

[Roberts]

I generated a 4835 for myself and then the 1099 PATR - when I entered $109 into line 5 - it showed as non-taxable and didn't flow through to anywhere on the 4835.

[Terry D EA]

Thanks Roberts but this is taxable income and the amount is in box 5. Client did receive the money so I'll let it go where it is for now.

[Scott_P]

_{I have done some in the past where they had used to have a farm and mortgage with Farm Credit. I have put it on Line 21 and never had a problem.}

[Terry D EA]

My thoughts too. I definitely know this guy had nothing to do with a farm mortgage. Line 21 is probably the best choice.