1099 MISC

[2floridians]

I have a client that receives 1099 MISC's from her deceased husbands insurance payments. He was an insurance salesman and passed away last year. She is getting his checks now for his % of the premiums that are paid on the policies that were written. A commission payment is what it is. When he had the insurance business they were claimed on his business return as income. Should these commission payments to her be reported on a Sch C still? There is no business, they are commission checks. On a schedule C she is responsible for self employment tax and for some reason that just doesn't sit right with me... Any comments or suggestions are appreciated.

[jainen]

>>There is no business<<

On the decedent's final return, allocate payments received or earned before death to Schedule C. Anything later is Line 21 Other Income.

[2floridians]

>>There is no business<<

On the decedent's final return, allocate payments received or earned before death to Schedule C. Anything later is Line 21 Other Income.

[Bart]

I have a client that receives 1099 MISC's from her deceased husbands insurance payments. He was an insurance salesman and passed away last year. She is getting his checks now for his % of the premiums that are paid on the policies that were written. A commission payment is what it is. When he had the insurance business they were claimed on his business return as income. Should these commission payments to her be reported on a Sch C still? There is no business, they are commission checks. On a schedule C she is responsible for self employment tax and for some reason that just doesn't sit right with me... Any comments or suggestions are appreciated.

Was the insurance salesman retired before he died?

[2floridians]

Was the insurance salesman retired before he died?

Yes, he retired several years ago, was killed riding his bike in 06. PA tax firm put everything on a C for the past few years. Even after they moved to Florida in 06

[Bart]

Yes, he retired several years ago, was killed riding his bike in 06. PA tax firm put everything on a C for the past few years. Even after they moved to Florida in 06

If he was retired, his commissions should not have had se tax anyway.

1402(k) CODIFICATION OF TREATMENT OF CERTAIN TERMINATION PAYMENTS RECEIVED BY FORMER INSURANCE SALESMEN. —Nothing in subsection (a) shall be construed as including in the net earnings from self-employment of an individual any amount received during the taxable year from an insurance company on account of services performed by such individual as an insurance salesman for such company if —

1402(k)(1) such amount is received after termination of such individual's agreement to perform such services for such company

[zeke]

PRIORITY ONE. Look at 2004 return with thought of amending & claiming refund of overpaid S/E tax. MUST be done by 04/15/2008.