Is a 1099 misc for funeral benefit for 1000 divided 4 ways all taxable to me?

tgoexpress — Thu, 06 Jun 2019 10:13:55 GMT

1099 was a funeral benefit for 1000 when my dad passed. It was divided four ways between my sister and two brothers; however 1099 is in my name. All boxes are empty except the account number box that reads funeral benefit.

Since the funeral benefit was reported on Form 1099-MISC...

AnnetteB — Thu, 06 Jun 2019 10:13:56 GMT

Since the funeral benefit was reported on Form 1099-MISC and the IRS has a copy of that form, they will expect to see it reported on your tax return. That does not mean that it should be fully included as taxable income though, since it was divided among you and your siblings. Be sure that you have some documentation to provide (if asked) that shows the amount was split four ways. Also, be sure to check with your siblings to determine whether they also received a Form 1099-MISC and to inform them that they need to report their share as income.

Furthermore, based on your description of “funeral benefit” I cannot tell if the amount should be taxable at all. I would suggest that you contact the payer for further guidance with regard to whether it should be taxable. If it is not, you can use the steps outlined below to report it on your return and make an adjustment for 100% of the amount instead of 75%.

Reporting this in TurboTax will be a two-step process, first to include the 1099-MISC as income and then to make a negative adjustment to remove the portion paid to your siblings.

To include the 1099-MISC as a part of your tax return, follow these steps:

On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
This opens a box where you can type in “1099-MISC” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
The search results will give you an option to “Jump to 1099-MISC"
Click on the blue “Jump to 1099-MISC” link
Answer Yes you did receive a 1099-MISC
Fill in the details from your 1099-MISC then click Continue
Provide a short description for the reason you received the 1099-MISC then click Continue
On the next screen titled, “Does one of these uncommon situation apply?” choose the last option, None of these apply and then click Continue
On the next screen asking if the 1099 involved work like your main job, answer No and click Continue
On the next screen, check the box that you received the income in 2016 and then click Continue
Finally, choose “No, it didn’t involve an intent to earn money” and click Continue
Answer the questions on the next couple of screens to finish the process

Now the income shown on the Form 1099-MISC has been added to your return. Next, it will be “removed” from the return.

Follow these steps:

Go to Federal Taxes > Wages & Income and scroll to the bottom of the screen to the Less Common Income section (expand the section by clicking Show More if necessary)
Click Start or Update beside Miscellaneous Income, 1099-A, 1099-C
Scroll to the bottom of the list and click Start or Update beside Other Reportable income
Answer Yes to move forward
Enter a brief description, such as “funeral benefit adjustment,” and 75% of the amount reported on the 1099-MISC as a negative number then click Continue
Click Done

When you see your Form 1040, the amount shown on the Form 1099-MISC will be reported twice on line 21 – once as a positive amount for 100% of the payment and once as a negative amount for 75% of the payment.

This is great info and appreciated, where in tax law does...

horsewhisperer — Thu, 06 Jun 2019 10:13:58 GMT

This is great info and appreciated, where in tax law does it come from and why the 75% figure?

I cannot site a specific tax law section for handling the...

AnnetteB — Thu, 06 Jun 2019 10:13:59 GMT

I cannot site a specific tax law section for handling the situation described. The 75% figure was specific to the original question asked because the 1099 in question reported a benefit that was to be split 4 ways -- only 25% belonged to the person asking the question.

topic Since the funeral benefit was reported on Form 1099-MISC... in Get your taxes done using TurboTax

Is a 1099 misc for funeral benefit for 1000 divided 4 ways all taxable to me?

Since the funeral benefit was reported on Form 1099-MISC...

This is great info and appreciated, where in tax law does...

I cannot site a specific tax law section for handling the...