A person purchased a motorcycle along with a insurance policy that, in case of sickness, the policy would pay the loan payments on the bike. The person became ill and could not work so the company made the payments. The company then sent a 1099-Misc with the payments it made in Box 3. I thought that if the person paid the premiums the proceeds were not taxable?? If this is the case, how is this reported?
I'm with you, George. Just like disability insurance premiums paid for with after tax money.
Anyway, there's a 1099 and must be dealt with. 1. do nothing, report nothing anywhere; wait for CP2000 letter maybe; maybe not!) 2. file paper tax return with statement and copy of the 1099 explaining why it's not on line 21. (line 20???? darn; I forget) Cant think of an option 3 right now. AGree?
ChEAr$, Harlan Lunsford, EA n LA
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