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Get your taxes done using TurboTax
@DianeW777 We may be misunderstanding each other. If a tenant in a rent controlled apartment building accepts an offer to move out so that the landlord can renovate and re-lease, to someone else, at a higher monthly rent, the tenant that vacated may claim that buyout amount as Other Income, not Ordinary Income, correct? In other words, the tenant should receive a 1099-MISC with the buyout amount in box 3 (not box 7) and the tenant should report this income on form 1040, line 21 as Other Income. Is this correct?
I am basing my understanding of this on two IRS publications:
1. Publication 544 (https://www.irs.gov/publications/p544),
2. Volunteer Tax Alert 2011- 08 March 4, 2011 (https://www.irs.gov/pub/irs-utl/VTA_2011-08_Cash_for_Keys_Program.pdf)