A developer building right next door to our home had to raze our garden in 2008 so that they could build their huge building. We asked in advance for $14 per square foot for the damage, and to allow them to work in and completely cover our garden with scaffolding for 18 months. They paid us in 2008, and the 18 months is over at the end of March
2010. Early in 2009 they sent us a 1099 misc, and although we did not consider the money they paid us "rent" they said we had no choice but to pay taxes, so we did. (They took dirt away and are now saying that the money should have included the cost of new dirt. The agreement we drafted, which they saigned, said nothing about the dirt - they took it away without permission. So we now have other expenses related to their work.)In 2009 water infiltration caused by their construction destroyed our finished basement. We signed a release from liability in exchange for money for the damaged basement. The release included our roof (which they'd damaged so it was leaking) and damage to the interior of the top floor of our house (from the roof leak.) In fact, it included every issue associated with their work, up until the date we signed the release. (We had a lawyer look at the release, but it was not signed after a court judgment or anything like that.) So it also included their using a lot of electricity because their remediation company plugged in super-duper dehumidifiers to stop mold from growing in our basement. We sent them copies of our highly inflated electric bills and they sent us checks. We also asked for reimbursement for furniture that was destroyed and that they threw away during remediation of the basement. And I got several estimates for bringing dirt into the garden and re- grading it, and added that in to the total release amount, too. The release included all of these things, plus any "future, unknown" issues arising from the water infiltration. To compensate us for "unknown" issues, we added some additional money to the compensation amount requested, which they gladly paid.
Since then we lost heat for a few weeks because they failed to comply with building codes and carbon monoxide built up in our home and shut our furnace off. They say that they'll compensate us for extra carbon monoxide detectors and space-heaters, but we haven't received the check yet. (They are now in compliance with the building code.)
Yesterday they sent us 1099 misc for all of the money they paid us in
2009. This includes the release money, and the expenses they paid us for through the year because of their work (extra electricity, etc.) and the items they destroyed and tossed which they paid for the estimated replacement cost of (which they paid separate from the release, too, but we didn't buy new items until 2010).I am pretty ignorant of tax issues, and when people even just start talking about "deducting the basis in your home" I get muddled. I usually use a simple TaxActOnline or TurboTax type of program to do my taxes, and I'd rather continue to do my taxes myself. But with these 1099 misc's (the amounts are in the "other income" boxes) - I think I need advice. Should I ask them to reissue the 1099 misc forms with the compensation noted in the "non-employee compensation" box - would that make any difference?
How should I deal with the 1099 misc forms (my partner received two and I received two too - I think because they gave us different checks for different items throughout the year?)?
Any advice you could offer would be deeply appreciated. Thank you! Violet
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