That
income arises because the broker lent out your securities to a short
seller. The problem with this kind of activity is that a Payment in
lieu of dividends is taxed at your marginal ordinary tax rate instead of
the more favorable rates used for qualified dividend.
Report this on line 21 of your Form 1040 - Other income.
Start the "Miscellaneous Income, 1099-A, 1099-C" interview down at the bottom of the "Your 2015 Income Summary" page
Start the "Other reportable income" interview
On the page "Any Other Taxable Income?" click YES
On the page "Other Taxable Income" ignore the "Do not enter income reported on Form 1099-MISC" warning and enter a description and amount.
Tom Young
