I also recieved one for the same reason. However, the 1099-Misc is submitted to the IRS. How do you correct this to avoid paying taxes for this sum? It should show that I'm missing a 1099-MISC reporting if I tried to just file without it.
It depends. Normally closing costs are added to the basis of your house to determine capital gains when you sell the house. Capital gains are the difference between your basis and your proceeds received upon the sale of your house. If you received a check for the closing costs, this is an economic benefit to you and is taxable income. in return, your closing costs, with the exception of mortgage interest and property taxes can be added to the basis of your house to lessen your capital gains when you decide to sell your house. Your mortgage interest and property taxes can be deducted this year providing you can itemize your deductions this year.
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I was the buyer of the house. I paid closing costs in addition to the purchase price of the home.
The 1099-MISC specifies other income of $752. How could I accumulate income by purchasing a home and paying closing costs?
You didn't accumulate income by purchasing a home and paying closing costs, but if the bank gave you a credit somehow then they are saying that it was a benefit to you that is taxable (which you can add to the basis of your home later). We would respectfully suggest calling the lender to ask them why the interpreted it as such.