Thanks, TurboTaxAnita, HOWEVER, I called the IRS today about something else and thus asked the same question just as a double check since I already had a rep on the phone... and the IRS says your answer is incorrect.. The IRS states:
*****THE TAXPAYER MUST REPORT THE NON-RECEIVED, 2018 REFUND, AS INCOME, INCLUDING THE RELATED INTEREST ON THE TAXPAYER'S 2018 RETURN EVEN THOUGH IT WILL NOT BE RECEIVED UNTIL 2019.*****
She explained that the IRS records it at a 2018 expense, issues the correlating 1099-G & 1099-INT and thus I must report it as 2018 income to match even though I won't actually receive it until later in 2019. She added that the 2019 replacement check causes no change on the IRS's books for 2019 but stays intact as a 2018 expense; the original lost check is reversed and replaced in 2019, creating a net transaction of $0 in 2019 so I still have to report it as income received in 2018.
I appreciate your super quick answer, but according to the IRS, it is incorrect and I had to include it on my 2018 return even though it seems very unfair that I have to report income I did NOT receive yet in the subsequent tax year. :(
