Form 1099NEC

Forum|Forum|5 years ago
May 14, 2021
2 replies
29 views

I received a 1099NEC for profit share that I receive from Real Estate. I retired in 2018 and am no longer active in the business but receive profit share from the organization. I am filling out my return on the Deluxe install but since I entered the profit share amount you want me to file a Schedule C. What do you recommend?

RayW7

Level 12

Enter the income in TurboTax at Other Common Income, 1099-NEC.

As you go through the interview choose "This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby"

This should avoid the Schedule C.

Hal_Al

Level 15

This might qualify as residual commissions.

After entering your 1099-NEC, you will encounter a screen titled "Does one of these uncommon situations apply". Check the box "This is not money earned as an employee or self employed individual; it is from sporadic activity or hobby".

Checking that box will put the income on line 8 of Schedule 1 as "other income" .

References:

https://ttlc.intuit.com/questions/1151879-retiree-trailing-commissions-self-employed-income

http://wanderingtaxpro.blogspot.com/2008/01/ask-tax-pro-residual-commisi0ns-paid-to.html

The IRS considers anything on a 1099-NEC to be self employment income. TurboTax (TT) aggressively steers you in that direction, even if the amount is on a 1099-Misc. If you try reporting 1099-NEC income as anything else, you chances of hearing from the IRS are higher.