A 1099-Misc was issued to a friend for a buyout from a school system in the amount of $65,000. $50,000 of that monies was placed in a 403-B acct. as a rollover. How does the friend not shown a $65,000 income?

A 1099-Misc was issued to a friend for a buyout from a school system in the amount of $65,000. $50,000 of that monies was placed in a 403-B acct. as a rollover. How does the friend not shown a $65,000 income?======= I do not think so;he needs to report all of the $65K on his return.If hemade no out of pocket expenses at his job , he would report the income on Line 21 of Form 1040. Employees of tax-exempt organizations established under section 501(c)(3) of the Internal Revenue Code can contribute to a 403(b). So I guess he needs to repot $65K on 1040 line 21. Contributions into the 403B plan are tax-deferred funds, meaning contributions reduce income subject to income tax. Only when you take distribution, you’d see a taxable event with the 403B plan. Employees are limited in the amount of money that can be contributed to the 403b account on an annual basis.in general, contributions are recorded on your W-2. Box 12 states the elective deferral amounts with box 13 checked to state the money is a retirement plan contribution. The W-2 will state whether the contributions are "excluded" or "deducted."Record deducted contributions when filing Form 1040 on line 36. Excluded deductions are not counted in your gross income and thus do not need to be recorded.