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williamaphipps
New Member

I received a 1099-misc from an oil company for property damages when they laid a gas pipe through my property. Do I include this 1099 in my return?

I understood that property damages was not taxable, so do I ignore this 1099-misc?

1 Best answer

Accepted Solutions
KrisD
Intuit Alumni

I received a 1099-misc from an oil company for property damages when they laid a gas pipe through my property. Do I include this 1099 in my return?

Don't ignore it, the IRS gets a copy and they may look for it on your return. Report the 1099, but also negate it with a negative entry. 

  • Enter the 1099-Misc in the Other Common Income section (Enter “1099misc” in the Search Box and Select “Jump to 1099misc”)

    • Indicate that it is a “Reimbursement for Damages”, that it does not involve work like your main job, and that it did not involve an intent to make money, and is not a recurring payment (received in the past or expected in the future).

    • The income will be reported on line 21 of your return.

To enter the expense:

    • Go to Less Common Income, Miscellaneous Income and Other reportable income (enter “other reportable income” in the Search Box and Select “Jump to other reportable income”)

    • Continue to the screen “Other Taxable Income”. Enter the description as “Cost of Damages” and the amount as a negative number. These are NOT wages.

A corresponding negative amount will be entered, and line 21 will be zero. See the attached screenshot example (different descriptions, but still offsetting).

(Thanks Todd Lee)

View solution in original post

1 Reply
KrisD
Intuit Alumni

I received a 1099-misc from an oil company for property damages when they laid a gas pipe through my property. Do I include this 1099 in my return?

Don't ignore it, the IRS gets a copy and they may look for it on your return. Report the 1099, but also negate it with a negative entry. 

  • Enter the 1099-Misc in the Other Common Income section (Enter “1099misc” in the Search Box and Select “Jump to 1099misc”)

    • Indicate that it is a “Reimbursement for Damages”, that it does not involve work like your main job, and that it did not involve an intent to make money, and is not a recurring payment (received in the past or expected in the future).

    • The income will be reported on line 21 of your return.

To enter the expense:

    • Go to Less Common Income, Miscellaneous Income and Other reportable income (enter “other reportable income” in the Search Box and Select “Jump to other reportable income”)

    • Continue to the screen “Other Taxable Income”. Enter the description as “Cost of Damages” and the amount as a negative number. These are NOT wages.

A corresponding negative amount will be entered, and line 21 will be zero. See the attached screenshot example (different descriptions, but still offsetting).

(Thanks Todd Lee)

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