Joann Posted February 17, 2010 Report Posted February 17, 2010 Taxpayer is in the Army Reserve. He received a 1099 Misc with $1000 in box 7. He says it is a bonus for recruiting a friend for the Reserve. Does he have to pay S.E. on this? I don'st know why it wasn't put on his W2 or do they always do this? Thanks Joann Quote
JohnH Posted February 17, 2010 Report Posted February 17, 2010 I would put in on Line 21 with no schedule SE, along with a good explanatory notation on the line saying something to the effect "Military Recruitment Bonus". He's not in the business of recruiting, so I see it as an award. Not sying IRS won't question it since it's in box 7, but at the end of the day it's facts & circumstances that control, not what box someone chose to use. Quote
mcb39 Posted February 17, 2010 Report Posted February 17, 2010 Line 21......Prizes and Awards...I have never had a problem with these. Quote
Joann Posted February 17, 2010 Author Report Posted February 17, 2010 Line 21......Prizes and Awards...I have never had a problem with these. Thank you both for your answers. I was a little afraid of it because the income was in box 7 of the 1099, but I will do it now. Joann Quote
TAXBILLY Posted February 17, 2010 Report Posted February 17, 2010 I have done what John suggested and I add: per IRC Sec. 183. 183 describes an activity not engaged in for profit. taxbilly Quote
JohnH Posted February 17, 2010 Report Posted February 17, 2010 Hey, I like that. Thanks for the tip, Taxbilly. Quote
TAXBILLY Posted February 17, 2010 Report Posted February 17, 2010 I always envision with delight the IRS guy who looks at it and says "What's an IRC Sec. 183?" taxbilly Quote
JohnH Posted February 17, 2010 Report Posted February 17, 2010 And you say, "Let's wrap up this audit with 'no changes' and then I'll be glad to explain IRC Sec 183 to you." Quote
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