I received a 1099-Misc for a roof grant through NC INSURANCE UNDERWRITING ASSOCIATION for a non-rental property 2nd. home we co-own with another family. The 1099-Misc only has our name on it since we were the ones negotiating the roof installation. It is my understanding that I must report this full value as income on my return. However, for all expenses associated with this property we split costs between owners. My question is how do I split this amount after reporting the full amount on my return? Is there a means to report half the amount of the roof cost as a deduction. In that the IRS receives a copy of the 1099-Misc. in my name I would think it would raise a red flag if I only reported one half the value on the 1099-Misc. as income.
Your thoughts are welcome
You can do a 1099-MISC from you to them for their share. You will need to enter the full amount then enter their half on your return as negative income to reduce yours. This is one method:
To enter the subtractionon your return:
To give them a 1099-MISC
General Instructions for Certain Information Returns (2023)
Nominee/middleman returns.
Generally, if you receive a Form 1099 for amounts that actually belong to another person, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received) for each of the other owners showing the amounts allocable to each. You must also furnish a Form 1099 to each of the other owners. File the new Form 1099 with Form 1096 with the IRS Submission Processing Center for your area. On each new Form 1099, list yourself as the “payer” and the other owner as the “recipient.” On Form 1096, list yourself as the “Filer.” A spouse is not required to file a nominee return to show amounts owned by the other spouse. The nominee, not the original payer, is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.
TurboTax will not accept a negative here. Error message that it is an invalid amount.