Tax on brokerage customer promotion, credit cash to account

[stovegrc]

Brokerage gave a cash promotion to brokerage account, for moving funds to them.

How are the cash funds taxed ?  1099-b given, no info on cash given. 

[FangxiaL]

Check to see if there is a Form 1099-MISC reported with the 1099 composite forms. It is reported as other income.

Follow these steps to report a 1099-MISC form:

To report the 1099-Misc form as other income:

1. Open or continue with the return
2. Click on Show more next to Other Common Income under the Income & Expenses section
3. Click on Start/Revisit next to Form 1099-MISC 
4. Enter the information from the 1099-MISC form.

[stovegrc]

Thank for the info. Checked the brokerage 1099 and there was no 1099 misc.

[FangxiaL]

From my own experience, I have seen that banks also report it as interest income. If it is not reported on a Form 1099-INT, contact the brokerage to find out if you should expect to receive a tax form.

@stovegrc

[Willie-53]

I stated this 1099 Misc was a Promo Offer from a Brokerage to move funds, and now Turbotax  is asking me to fill out Schedule C- Profit or Loss from Business (Sole Proprietorship).  Is it really necessary to go down this rabbit hole, or is there an easier way? Thank You!

[MonikaK1]

When entering a Form 1099-MISC for an amount paid for a reason such as you described, you can identify that it was not income from working so that it doesn't get misclassified as self-employment income:

1. Select Income from Form 1099-MISC under Wages and Income.
2. Enter the payer information and dollar amount
3. Enter a description for the payment
4. When asked about Uncommon Reasons, select that none apply or select one that adequately explains the reason
5. When asked about the frequency of payment, select received in 2023
6. When asked "Did (description) involve an intent to earn money?" answer No (that is, it is not earned income and therefore not subject to self-employment tax)

If you already entered this Form 1099-MISC in another section, delete that entry.

[Willie-53]

Thanks so much for your help. The "intent to earn money" explanation was misleading. and I checked "Yes" which caused the problem.