Can I NOT fill out a Schedule C for "other income" on 1099-Misc from Rental Property?

[Zman8228]

Hi All,

So my wife and I have one rental home that was use a management company for.  We are pretty much 100% hands off with the property.  They do everything.  So.... we received a 1099- MISC this year and their was income in Box 3 (Other Income).  This has not happened before.  The amount in that box was less than $300.  Turbo Tax says that you are unable to enter that income in the rental section and, as such, generates a Schedule C.  My question is, do I have to go through the whole rigmarole of a Schedule C for 300 bucks?!? Is there a way I can stop TT from generating this form and entering it by reporting that income somewhere else?  Or do I have to do the Schedule C?

[Anonymous_ · Accepted solution]

No, just report the rental income on Schedule E (in the Rentals section of TurboTax).

In the interim, you can (and should), request that the management company issue you a corrected 1099-MISC with the figure in the proper box (Box 1 for Rents).

[Zman8228]

I called the management company and they said it was security deposit payment.  After a tenant left, the management company had to do $300 in repairs to the house that they deducted from the tenant's security deposit and then expensed me.  So that's why it's in Box 3.  Still, I shouldn't have to fill out a Schedule C for that, should I?  

[Carl]

Your management company is just flat out *WRONG*. But it's not your problem really, because the IRS will fine them accordingly.

All income received for rental property from *ANY* source for *ANY* reason is reported on SCH E. Period. End of Story.

You can completely disregard that 1099-MISC "as if" you never received it. Just make sure you include the amount reported on that 1099-MISC as rental income on the SCH E. There is no need to report the fact that you got a 1099-MISC, because when you e-file that 1099-MISC is *NOT* sent to the IRS. In fact, absolutely nothing what-so-ever is transmitted to the IRS to indicate the income was reported to you on a 1099-MISC.

So just add the $300 to the total of all your rental income received and report it on SCH E.

When the IRS receives their copy of the 1099-MISC from the entity that issued it to you, the IRS will question "them", not you.