Rent income on 1099-MISC

Some of my real estate rent income are reported on 1099-MISC. Does this mean that I have to report these payment on Schedule C instead of E (thus subject to potential SE tax)?

========================================= MODERATOR'S COMMENT: Perhaps you would be kind enough to tell us in which box of the form the rent is shown?

Reply to
STAREX
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"STAREX" wrote

If it's in Box 1 "Rents", you properly report it on Schedule E.

If it's in Box 7 Nonemployee Compensation, then they reported it wrong, which unfortunately "smart" people do from time to time. You can get them to fix it, which they should do, or report it on a Schedule C and subtract it back off with an explanation that it goes to the Schedule E, where of course, you properly reported it.

Reply to
paulthomascpa

It's shown in Box 1 Rent.

Called IRS, this time the agent gave clear answer - either C or E. However if on Schedule E, I need to break up the total (because the rent shown on 1099-MISC covers more than one properties). I guess it's a tough job for IRS to cross-check and an invitation for audit :(

Reply to
STAREX

Reply to
Gene E. Utterback, EA, ABA

Shall I always record conversation with IRS helpline? Or who can help me if later I found to have made a mistake by following IRS helpline advice? :)

Reply to
STAREX

Is it that high? I remember hearing a study where people called the IRS with many questions, but asked the same question six times. Well over 80% of the responses were considered to be incorrect.

Technically you are not allowed to rely on anything the IRS tells you unless it's in an official writing. Your best bet is to fine a good tax professional. Reliance on a tax pro can help you avoid penalties, where relying something an IRS employee tells you may not.

___ Stu

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Reply to
Stuart A. Bronstein

How can reliance on a tax pro help you avoid penalties? If the IRS finds something wrong on the taxpayer's return they come after the taxpayer. The taxpayer can sue the tax preparer, but this won't work if the taxpayer hid information from the preparer, and besides lawsuits may not always work. You're write that only the penalty of written advice can be abated.

BEGIN QUOTE IRC 6404

(f) Abatement of any penalty or addition to tax attributable to erroneous written advice by the Internal Revenue Service (1) In general The Secretary shall abate any portion of any penalty or addition to tax attributable to erroneous advice furnished to the taxpayer in writing by an officer or employee of the Internal Revenue Service, acting in such officer?s or employee?s official capacity. (2) Limitations Paragraph (1) shall apply only if?

END QUOTE

Does this mean that if the publications or tax topics give bad advice then their penalty can be waived?

Reply to
removeps-groups

Shall I always record conversation with IRS helpline? Or who can help me if later I found to have made a mistake by following IRS helpline advice? :)

Reply to
Gene E. Utterback, EA, ABA

not that there is anything wrong with that . . .

Reply to
Pico Rico

In addition to Gene's fine answer, Schedule C is approriate for real estate professionals who meet the R E Professional rules.

Reply to
Arthur Kamlet

I was kind of kidding about recording, Did you see the :) at the end? I won't full trust pro either because I had bad experience when I bought my primary residence (which supposedly was a simple enough transaction).

Honestly I think these have nothing to do with personal background. Non-intuitive/non-logic rules won't help anybody.Taking my OP as an example, assuming I have $10K rent income on 1099-MISC for two rental properties and this $10K just covers part of the total rent. To follow the rule, my schedule E may show $7K and $8K for the two properties respectively. Now please tell me how IRS can easily cross check its copy of 1099-MISC and my tax return? This example is a real life case except the $ numbers.

Again, I don't mean to challenge rules, I just want to avoid being punished for no good reasons.

Reply to
STAREX

Gene, I thought the Schedule C trigger was significant PERSONAL services. Every vacation home I've ever paid to rent included furniture, utilities and television. One had a telephone (local calls only) and Internet access. I'm fairly certain those vacation home owners are not reporting their rental activities on Schedule C.

Reply to
Bill Brown

"STAREX" wrote in message news: snipped-for-privacy@l16g2000vbl.googlegroups.com... Now please tell me how IRS can easily cross check its copy of 1099-MISC and my tax return? This example is a real life case except the $ numbers. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ All they can do in the way of cross-checking is to verify that you have reported AT LEAST as much as the total of all 1099s you received. A doctor may get dozens of 1099-MISC forms from various insurance companies along with numerous payments by check or cash. He does not have to break down his income into dozens of Schedule C's in order to enable the IRS to cross-check them to his tax return.

Reply to
CRAIG CHITLIN

Agree, there are always ways to do such basic check. I was hoping that IRS could spend more efforts to design more intutive/logical forms which could make everybody life easier instead of un-intutive rules. e.g. forcing people to report BUSINESS account interest on schedule B (i.e. mix personal account interest), spread non-property specific expense accross multiple rental properties on schedule E etc.

The reply (to "still think you are an engineer") was related to anthor discussion about such non-intutive rules that only confuse honest people without being able to catch doggy filers.

Reply to
STAREX

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