ToddL99
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Get your taxes done using TurboTax

Report it as the sale of an investment (not reported on Form 1099-B).  This will ensure you obtain the correct tax treatment for the proceeds (Long-term gain (or loss) on the sale of an investment).

 

The payer should have issued a Form 1099-B, not 1099-MISC. Unless you can get then to correct their error (highly unlikely under the circumstances), report it in the Stocks, Bond, Mutual Funds and Other interview under Investment Income (answer "No" when asked if you got a 1099-B).

 

Depending on the amount involved, you will probably get an automated notice from the IRS later this year, proposing to increase your taxes because of the missing Form 1099-MISC. This is not an audit and is very common.

 

The notice will ask if you agree with the change (increase in tax) and you will have the opportunity to explain why you don't. The explanation is simple - the proceeds were from a long-term investment, were incorrectly reported on 1099-MISC and you did report them on your Schedule D.