Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 03-31-2009, 11:09 AM
Junior Member
 
Join Date: Mar 2009
Posts: 1
1099-MISC but it's not income

We own a home in Brooklyn, NY. The lot next door was bought by a non-profit who tore down the existing warehouse and is building a school.

To tear down the old building they had to destroy our garden, so we made an agreement that they would pay us for the loss of the plants, and the destruction of and loss of use of the garden. What they paid us is less than the value of the property, and is meant just to make us whole.

They sent a 1099-MISC for the amount they paid us in 2008 for the garden. They had the amount in box 7, and I asked them to move it to box 3, which they did.

Everyone we talk to at the IRS says the money they gave us is not taxable, and they shouldn't have sent the 1099, but when the IRS technical people sent an email, it said *if* the payment was for damages or interest then we had to pay taxes. It is for damage, but not "damages" in the legal sense, I think. We have no choice but to pay taxes on the compensation, or get into a fight with the IRS.

Our neighbor said they will reimburse us for the taxes we have to pay, since they never intended for us to pay taxes.

Then they flooded our basement and we had to rip up the kitchen and carpet, tear down sheetrock, etc. They agreed to compensate us for the damage. They put in industrial dehumidifiers and blowers to dry out the basement, and agreed to pay our electricity bills.

Now they are saying they *will* send a 1099 for 2009 as well. This means we will have to pay taxes on compensation for destroying our basement, reimbursement for electric bills, and reimbursement for taxes for 2008!

Our understanding is still that we shouldn't be issued a 1099 for this type of payment. I think I'll ask them to pay our future electric bills directly (make the check out to ConEdison), but what would be the best way to deal with this? Thanks very much. --E.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
where to add any 1099 misc income anjanette241 Income 1 02-13-2009 07:44 PM
1099-MISC income - how to report it? rrafferty Income 1 02-11-2009 12:18 PM
1099-Misc income csrcookie Income 2 02-04-2009 06:14 PM
1099-Misc Income and IRA sirscott IRA/Sep 2 03-02-2008 02:35 AM
1099-MISC income guidowitz Income 3 02-14-2008 12:07 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning