I purchased stock through Robinhood to make money. I received a promotional stock, valued at $3.50. It was included on my 1099. Is this a Self-Employed business?

[Critter-3]

For any who read this thread in the future ... the "free" stock you got from Robinhood has a value and the 1099-misc reports that value.  Now the 1099 needs to be reported as income and this becomes the basis of the stock so when you sell it you do not pay taxes on that amount twice.  This is no different in concept than if you invested your taxable dividend in new stock.  Then if/when you sell the "free" stock you have a basis in it ... the 1099-B may already have the correct amount and if they do not you can make a correction.

To enter this 1099-misc for the free stock gifted to you ...

Here's how to enter it in TurboTax.

• Click the Federal Taxes tab ( Personal in the Home & Business version)
• Click Wages & Income. (Personal income in the H & B version)
• On the screen "Your 2019 Income Summary," scroll all the way down to the last section, "Less Common Income."
• Click the Start or Update button for the last topic, "Miscellaneous Income, 1099-A, 1099-C."
• On the next screen, "Let's Work on Any Miscellaneous Income," scroll down and click the Start or Update button for the last topic, "Other reportable income."
• The next screen asks, "Did you receive any other taxable income." Click Yes.
• On the next screen, "Other Taxable Income," enter a description and the amount. Click Continue.
• On the next screen click Done.

The income will be reported on Sch 1 line 8 with the description that you entered.

[Aswift14]

If I lost money do I need to still buy turbo tax premier to do my taxes and pay 170 or can I do it another way

[Critter-3]

Win , lose or draw all stock sales must be reported.

If you use the Online version you will need Premier  or better  unless you qualify for one of  the IRS FREE FILE options.

If you use the Downloaded/CD version then any of them will work.  

If you qualify   you can use one of  the 10 IRS FREE FILE options to file a fed & state return for free ... but you must log in thru the IRS site :

https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

 For Filing Season 2021, you must make $72,000 or below to use one of the 10  IRS Free File partner offers.

If you choose the TT option then you can log in with your same user ID and agree to switch to the FREE FILE option then your progress will be preserved.  This will only work if you qualify for the TT option which is NOT the same for other IRS FREE FILE options...

To qualify for free 2020 federal and state tax returns with the IRS Free File Program delivered by TurboTax, you'll need to meet at least one of these requirements:

• A maximum 2020 adjusted gross income (AGI) of $39,000; or
• You qualify for the Earned Income Tax Credit (EITC); or
• You served as active duty military (including Reservists and National Guard) with a maximum 2020 AGI of $72,000 (you'll also need a military-issued W-2).

[fshthe2]

I have been using this thread to help with my similar situation and I just wanted to make sure I am reporting everything correctly but not over reporting (not able to import tax documents automatically). I sold the free stock from Robinhood and used that money along with my own to purchase stock in a different company. So the same amount is showing up on the 1099-MISC section as 3-Other Income, and on the 1099-B section as 1e-Cost or other Basis in the paperwork I received from Robinhood. I understand the "in and out" you described, they reported it so I have to also because it was income.  But in my case it's also money I spent and I'm including on another form. Also I'm not sure how to answer the intent to make money question they ask because it was more of an incentive but I did buy more stock with it. I hope this makes sense any help is greatly appreciated.

[DaveF1006]

It depends. The question here asks if you intended to make money in this transaction. If you say yes, then you will be expected to pay Self-employment tax as well as income tax. Since this isn't a business, you would say no, Then it will be taxed as miscellaneous income rather than self-employment income.

[fshthe2]

I had a feeling that’s what kept pushing me towards all the self employment questions, thank you. So to be sure I’d do the “in and out” as described by Kathyrn3G in the “Less Common Situations” section and include it in the transactions for the 1099-B? Then if I’m understanding all this correctly I wouldn’t have to go to the 1099-MISC at all. Or do all three sections need to be filled out?

[Critter-3]

STOP the madness !!!!!

The value of the free stock that was given to you is reported on the 1099-misc and you report that as other income on Sch 1 line 8   and then since you paid tax on that amount it becomes the cost basis of the stock when you sell it ... so that is why you see the same number in both places.

You can report it as other income on Sch 1  line 8. Here's how to enter it in TurboTax.

• Click the Federal Taxes tab ( Personal in the Home & Business version)
• Click Wages & Income. (Personal income in the H & B version)
• On the screen "Your 2020 Income Summary," scroll all the way down to the last section, "Less Common Income."
• Click the Start or Update button for the last topic, "Miscellaneous Income, 1099-A, 1099-C."
• On the next screen, "Let's Work on Any Miscellaneous Income," scroll down and click the Start or Update button for the last topic, "Other reportable income."
• The next screen asks, "Did you receive any other taxable income." Click Yes.
• On the next screen, "Other Taxable Income," enter a description and the amount. Click Continue.
• On the next screen click Done.

The income will be reported on Sch 1 line 8 with the description that you entered.