How to report 1099 NEC for providing room and board?

[domerdoc]

Received payments reported on 1099 NEC from insurance company for providing room and board in personal home for friend displaced from home. Payments were for claims submitted by the insured as covered benefit to cover "cost" for provided room, meals, cleaning, etc.  Weekly claims were submitted for single charge estimate.  Presume this needs to go on schedule C but how to report "expenses" to offset income.  Is there option for per diem expense?

[Vanessa A]

This should actually go on Schedule E as rental income, not schedule C.  You were not engaged in providing a service or business, you were basically letting someone use your property to live (rent).  No, there would not be an option for per diem expense.

To enter the income as rental income click start next to Rental Properties and Royalties, then walk through and answer all the questions.  this will allow you to enter your income from the insurance company as well as expenses you incurred renting to your friend. 

[domerdoc]

Thank you for the suggestion, but my understanding is that providing personal services makes this a business that needs to go on schedule C.  Services include providing meals, laundry, personal supplies, shopping, etc.  This came from guidance from two accounting sources Googled.   There was not expectation of profit and receipt of 1099NEC was a surprise.  The performed activity was for 1 person but ongoing for 6 months.  Perhaps better reported as personal services, but how to account for expenses related without record of receipts?

[DianeW777]

You can report this as other income since you were not engaged in this activity for a profit motive.

It appears you were not engaged in this activity for a profit, so you also have the option to report this as 'Other Income'.  This reporting does not allow any expenses to offset the income.

Other Miscellaneous Income:

Go to the Wages and Income  section of TurboTax

1. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
2. Select Other reportable Income > Enter a description (----) and the amount

If you decide this was for profit, complete your Schedule C, for self employment, then enter your expenses there. As far as utilities, insurance, property taxes, etc, you should use the square feet for the room divided by the whole house or apartment square feet to arrive at the business use percentage.  If there were expenses directly for the displaced friend and not the whole home, those can be deducted without allocation.

• What self employment expenses can I deduct?

@domerdoc 

[Edited: 02/14/2024 | 12:40 AM PST\

[domerdoc]

This was really a one-off, with no intent to operate a business and no intent to "make a profit".  I'm inclined to say this would be more appropriate to report as 1099-misc or Other income.  There would be no expenses to report to offset income, but at least would take it out of self-employment or rent.  An IRS instruction describes situation where something without intent would not constitute a business.

[MarilynG1]

Yes, when you enter your 1099-NEC, you can choose the option 'this is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby...'

In this case (and also the 1099-Misc option you mention), the income is reported as 'Other Income'.

@domerdoc