topic I received a 1099-misc for rental income that meets the "minimal rental use" so I don't have to report it. What do I do with this 1099 form? Ignore it? in Investors & landlords

I received a 1099-misc for rental income that meets the "minimal rental use" so I don't have to report it. What do I do with this 1099 form? Ignore it?

71lake — Sat, 01 Jun 2019 14:55:05 GMT

The 1099-misc I received says it was furnished to the IRS. Is the IRS going to release it doesn't appear on my tax return because it meets the minimal rental use criteria (cottage was rented less than 15 days, used as a residence for more than 15 days). Seems strange to just ignore this 1099 that was sent to me. Should I hand write a note on it explaining why it's not in my return and submit it along with my return? And why, when entering rental income as a 1099-misc, does Turbotax not ask me if the property was rented less than 15 days? If I didn't know about this minimal rental use thing, I would have overpaid on my taxes...

You can handle this one of a couple of different ways....

DDollar — Sat, 01 Jun 2019 14:55:33 GMT

You can handle this one of a couple of different ways.

You can report it as rental income, and then enter an expense for the same amount. It will net to zero, and have no impact on your tax, but the 1099-MISC will be reported to the IRS.
You can do nothing, and wait for the IRS to send you a letter. You can then respond to the letter and explain that it was below the threshold.
You can not file it, and include a note of explanation with your return. You will have to print and mail your return.

Thanks for the response. Option 1 seems best however, the...

71lake — Thu, 06 Jun 2019 08:07:02 GMT

Thanks for the response. Option 1 seems best however, the only place I can see to enter rental income generates a Schedule E, and then I get an error from Turbotax saying my rental period was less than 14 days so I should not have a Schedule E. I did find a section called "miscellaneous income" under the "less common income" heading. I'll try that and I hope I don't get in trouble for receiving a 1099-MISC but not completing the "1099-MISC" section of Turbotax. It would be great if Turbotax software were improved for this sort of thing next year as it doesn't handle short term vacation home rentals very well. Thanks again for the help.

Re: I received a 1099-misc for rental income that meets the "minimal rental use" so I don't have to report it. What do I do with this 1099 form? Ignore it?

Samanthacorinne — Sun, 25 Apr 2021 14:59:30 GMT

Hey there, can you tell me what happened with this? I am in the same situation now.

Re: I received a 1099-misc for rental income that meets the "minimal rental use" so I don't have to report it. What do I do with this 1099 form? Ignore it?

Hal_Al — Sun, 25 Apr 2021 17:14:07 GMT

There are several ways to do the "enter the 1099-Misc then do a deduction to get to zero" technique in TurboTax.

1. Enter it on Schedule E as described above. When asked the number of days rented, enter something more than 15. When you get done, with the rental section, go back and change it to the actual number of days rented. That should save the schedule E.

2. Report the income as misc line 8, Schedule 1 income (enter in TurboTax at the 1099-Misc screen) . Then enter a line 8 deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Answer yes to Any other Taxable Income -On the next screen, Enter the number with a minus sign (-) in front. Briefly explain at description.

Re: I received a 1099-misc for rental income that meets the "minimal rental use" so I don't have to report it. What do I do with this 1099 form? Ignore it?

Samanthacorinne — Sun, 25 Apr 2021 17:00:43 GMT

This is incredibly helpful, thank you so much for taking the time to answer my question. I will give that a try.

Re: I received a 1099-misc for rental income that meets the "minimal rental use" so I don't have to report it. What do I do with this 1099 form? Ignore it?

Samanthacorinne — Sun, 25 Apr 2021 20:56:23 GMT

I am realizing the company sent me a 1099-NEC, does this change anything?

Re: I received a 1099-misc for rental income that meets the "minimal rental use" so I don't have to report it. What do I do with this 1099 form? Ignore it?

Hal_Al — Sun, 25 Apr 2021 21:35:39 GMT

Q. I am realizing the company sent me a 1099-NEC, does this change anything?

A. Yes, it makes choice #2 above better,

The IRS considers anything on a form 1099-NEC to be self employment income. So, your chances of hearing from the IRS went up a little.

Ask the "company" why they sent a 1099-NEC.