Ask Experts Questions for FREE Help !
Ask
    jackdog's Avatar
    jackdog Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Feb 2, 2011, 08:15 AM
    1099 Misc. Got in 2010 for income from 2004
    I received a 1099 Misc with a large amount of money in box 7 from my previous employer for the year 2010. A letter from an attorney was enclosed also stating "The amounts are being deemed as loans to you in 2004&2005 which are being written off in 2010. I have not been employed with them for 2 years.To compound the situation the company is out of business and going bankrupt. Called the attorney and got nowhere what can I do?
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Feb 2, 2011, 11:33 AM

    It appears that the company issued form 1099-misc for debt canceled by them.
    Debt canceled is reported on 1099-C (instead of 1099-misc) and it should be reported as ordinary income on your tax return.
    jackdog's Avatar
    jackdog Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Feb 2, 2011, 12:03 PM
    How do I correct this?
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #4

    Feb 2, 2011, 07:39 PM

    It is not easy to correct this. Call IRS.
    You may file your tax return and claim the amount as debt canceled and report as income. You will not pay SE tax of 15.3%.
    Also attach a statement with your tax return, why you are reporting 1099-misc income as debt canceled. Attach letter from attorney to prove your statement. Mail your tax return.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Feb 11, 2011, 11:13 PM
    MukatA's recommended course of action seems to be the best way to go.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

1099 Misc Income [ 1 Answers ]

Is there another way to report 1099 Misc income other than a Schedule C?

1099 MISC income [ 1 Answers ]

We have an employee who is exercise instructor who also did some painting in our facility for a flat fee. Is the painting income reportable on Form 1099 and if so which box?

1099-MISC income while on H-1B Visa [ 5 Answers ]

Is it legal to have a 1099-MISC income while being on H-1 Visa? The income is derived from a web based business to while the individual is affiliated but not an employee of. The profit earned by him is reported on a yearly basis as a 1099-MISC that is sent to him by the company. Is this legal? Will...

How to report income on 1099-Misc? [ 1 Answers ]

I got both W2 & 1099-Misc (Box 7. Nonemployee Compensation) from my employer. When I entered 1099-Misc income in TurboTax, it produced a Form 4137 (social security & medicare tax on unreported tip income). The income reported on 1099-Misc is not unreported tip income, but performance based bonus...

View more questions Search