My wife received a 1099MISC from a direct sales company she sells for. The problem is that the income amount reported includes some sales where the company assumes she made 25% profit, but in reality she didn't make anything because she turned around and sold it to a retail store and made nothing. I know that doesn't make a lot of sense, but it was one of those help out a friend things.

Anyway, I would like to know where I can claim an offset to the 1099MISC income so that we report her income correctly. Also, is there any other proof required other than the sales receipts to the retail store?

Thanks

You can make an adjustment to cost of goods sold to compensate for the discount she gave her friend. She should pay taxes on money she did not make.

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Originally Posted by fuchsteiner

My wife received a 1099MISC from a direct sales company she sells for. The problem is that the income amount reported includes some sales where the company assumes she made 25% profit, but in reality she didn't make anything because she turned around and sold it to a retail store and made nothing. I know that doesn't make a lot of sense, but it was one of those help out a friend things.

Anyway, I would like to know where I can claim an offset to the 1099MISC income so that we report her income correctly. Also, is there any other proof required other than the sales receipts to the retail store?

Thanks

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I hope you meant she should NOT pay taxes on money she did not make. Just wanted to clarify.

Yes, that is what I meant! Note the TIME I typed in the answer! :-)