topic Rebate received on behalf of HOA being taxed? in Deductions & credits

Rebate received on behalf of HOA being taxed?

VelcroFace — Sun, 02 Feb 2025 22:24:51 GMT

While serving on the board of our HOA, I filed for a rebate from our local water district for upgrading our community’s irrigation. The rebate could not be issued to an entity like the HOA, only to an individual. When I received the rebate, I wrote a check to the HOA in the same amount. My net gain was zero.

Now the water district has sent me a 1099-MISC, listing the refund as my personal income. Payments to an HOA are not deductible as an expense. So, how can I report it so I don’t get taxed on money I simply forwarded to the HOA?

Re: Rebate received on behalf of HOA being taxed?

MaryK4 — Sun, 02 Feb 2025 22:39:12 GMT

If you report the 1099-MISC as other income, you can make an additional entry for Miscellaneous Income with the amount as a negative to cancel the income. Use a description such as "1099-MISC received on behalf of HOA".

This way you have the income reported, but it will be subtracted from the income. Keep records of the transaction with your tax records.

Re: Rebate received on behalf of HOA being taxed?

VelcroFace — Mon, 03 Feb 2025 16:14:52 GMT

Where exactly would I make that negative entry? Is there a particular form and/or worksheet?

Re: Rebate received on behalf of HOA being taxed?

RobertB4444 — Mon, 03 Feb 2025 16:25:21 GMT

In TurboTax you will scroll down to the very bottom to 'Less Common Income' and the last entry in that section, 'Miscellaneous Income'.

Click on that and then, on the new list that pops up, scroll to the bottom again and click 'Other Reportable Income'. This allows you to enter a description and amount to offset the HOA rebate.

@VelcroFace

Re: Rebate received on behalf of HOA being taxed?

Opus 17 — Mon, 03 Feb 2025 16:27:31 GMT

@VelcroFace wrote:

Where exactly would I make that negative entry? Is there a particular form and/or worksheet?

It just goes under "other income" like any other cash income you might receive, except use a minus sign. (There is no specific entry point for negative numbers.)