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Level 1

I received $9000 in form 1099 from the builder for construction defect settlement, IRS says it is non-taxable, how do I enter in turbo tax to not get any tax?

 
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Level 20

I received $9000 in form 1099 from the builder for construction defect settlement, IRS says it is non-taxable, how do I enter in turbo tax to not get any tax?

There are two methods, neither one is perfect.

One, just leave it off. The IRS will definitely send a letter saying "you forgot to report some income" and you would answer with a letter explaining that this was a settlement for construction damages, and reduces your basis in the home but is not taxable.

Or two, enter the 1099-MISC (make sure that the money is in box 3, not box 7, and you indicate this is a settlement so you don't get taxed for self-employment as well.  then go back into other miscellaneous income an enter an item for "adjustment for non-taxable damage award" of negative or minus $9000.  That will offset the income.  That should also stop you getting the letter that says "you forgot to report a 1099-MISC form" but it doesn't necessarily mean you won't get a different letter asking you to explain the negative adjustment.

Level 1

I received $9000 in form 1099 from the builder for construction defect settlement, IRS says it is non-taxable, how do I enter in turbo tax to not get any tax?

Where do I entered 1099 amount?  Which line on schedule c?  Where do I enter the negative 9000 as misc income?
Level 20

I received $9000 in form 1099 from the builder for construction defect settlement, IRS says it is non-taxable, how do I enter in turbo tax to not get any tax?

It's not schedule C at all, assuming that this was your personal home we're talking about.  It's line 21 other income with a corresponding line 21 negative offset.  In turbotax, enter it using the 1099 interview in personal income, not business income.
Level 1

I received $9000 in form 1099 from the builder for construction defect settlement, IRS says it is non-taxable, how do I enter in turbo tax to not get any tax?

So basically I entered two lines on line 21, one for $9000, one for $-9000?
Level 20

I received $9000 in form 1099 from the builder for construction defect settlement, IRS says it is non-taxable, how do I enter in turbo tax to not get any tax?

Yes.   By entering it specifically as a 1099-MISC, (with payer ID and so on) the existence of the form is acknowledged by the IRS and they won't think you forgot or are hiding it.