1099-MISC - Rental Assistance

Forum|Forum|4 years ago
March 17, 2022
2 replies
0 views

I have a renter that did not pay his rent during the pandemic. He requested rental assistance from the city which I received. The city issued a 1099-MISC and put the income in Box 3 as "Other Income" rather than rent. When I enter this under the 1099-MISC section, it is asking me if "it involved the intent to earn money." Do I answer "Yes" for this question even though I feel this money should have been categorized as rent?

Best answer by DianeW777

@JamesG1

Yes, I was able to review the 1040 and Schedule 1 but the income was not properly recorded as +$1 and -$1 = $0. It only showed the +$1 and not the -$1.

Thank you!

It's actual rent income and should be reported as such regardless of how it shows upon the Form 1099-MISC . Enter the Form 1099-MISC as rental income, box 1. Do not enter it in box 3. This will process the income exactly as it should be on your tax return.

@lulalee

[Edited: 04/18/2022 | 8:59a PST]

taxlady28

Level 10

Answer No. The question is confusing but answering yes will make it a Schedule C and that is not correct.

ColeenD3

Level 15

Put it in as suggested above and then back it out the same way with the description of improperly recorded rent. Then enter it on Schedule E, so you can show the rental income and be able to take your expenses.

vmart15

Level 2

I have the similar situation with that 1099-MISC. What do you mean by "back it out the same way with the description of improperly recorded rent"? How would I back it out?

Thank you!

LeonardS

Level 14

You will "back it out" by entering the 1099-MISC a second time using the description Improperly Recorded Rent and enter the amount as a negative number. This will back out the 1099-MISC. Then enter it on Schedule E, so you can show the rental income and be able to take your expenses as @ColeenD3 explained in her post.

@vmart15

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"