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Old 04-14-2015, 08:39 PM
PopoFrito
 
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1099-MISC Gift/Stock Sale

In 2000, my kids received a gift of private stock shares from my brother-in-law. Basically since then the stock has been worthless, until 2014. The company settled some lawsuits and decided to buy back all the private shares. The kids received between $8,000 to $10,000 payments from the company. The company has issued them all 1099-MISC with the amounts listed under Other Income.

Just wondering if this is should be considered a "gift" or a stock sale instead of being declared on a 1099-MISC?

Any input would be greatly appreciated!



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Old 04-17-2015, 02:00 AM
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Just wondering if this is should be considered a "gift" or a stock sale instead of being declared on a 1099-MISC?=======>>>As you said, actually it was a gift when it was gifted to your kids from their uncle;however, the FMV of the shares repurchased by the company needs to be treated as other income realized thru sales of the worthless gifts for your kids on their 1040s, No longer gifts. There is no listing - in all of the copious types of payments that should be reported on a Form 1099-MISC for how one goes about reporting payments made in redemption of stock. There is an "other" category, but the instructions suggest reporting payments such as prizes and awards and lawsuit recoveries in that category. Due to the reason, Form 1099-MISC is not appropriate form for reporting the big company redemption payments.



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