I have coupon interest from a prepaid forward securities contract. Can't I report that as ordinary income?

Forum|Forum|1 year ago
February 19, 2025
4 replies
117 views

My 1099-MISC intructions say to report as ordinary income but TurboTax tries to have me report it as business income. This is not correct. How do I get around this circular issue?

baldietax

Level 12

had a similiar issue with one of those cash bonuses from a brokerage last year which was reported in 1099-MISC Box 3; there's a question after you put in the 1099-MISC whether it was an "Intent to earn money". Say No to that and it should flow to Schedule 1 line 8z and then hit your 1040 on line 8.

I'm not a CPA and not encountered a "prepaid forward securities contract" so I can't speak to any special tax treatment (tho, sounds like ordinary income to me) - but that's how to do in TT.

AmyC

Level 15

Only because you have a statement saying to report it as ordinary income, would you do so. Typically, it isn't ordinary income -but can be. So you are in great shape!

Follow these steps:

Log in to your return.
Go to income
Scroll down to Other Common Income
Select Income from 1099-MISC
Edit/ Start/ Revisit
Enter income -the income should be in box 3,
Enter tax if any withheld in box 4
Continue
Describe the reason -
continue
None of these apply
Continue
Did this involve main job?
No
Continue
How often do you get?
Got in 2024
Continue
Intent to earn money?
No
Continue
Do you have another?
No
Continue

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user17753549921

Level 2

I have the same issue. I use the Desktop version 2025. I do not see the question 19 listed below (Intent to earn money). After 17 and 18 below, it states

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Add new Line of Work

We’ll include this income in the Self-Employed section (Schedule C) of your tax return. You can add any other self-employment income not on a 1099-MISC later.

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This is not a self-employment Income. If I choose the FORMS view (View menu), there is an option to click on 'Other Income' but it reduces the refund drastically. Not sure which is the right option