1099-MISC box 3 (house repairs)

Forum|Forum|3 years ago
January 31, 2023
3 replies
49 views

I received 1099-MISC from my property management company. box 1 has the rents. box 3 is other income (damages from house repairs). this amount was included in the business income (net business income). when i edit this, it's asking for business name, address, EIN number, business code, accounting method, active role, qualified business income (QBI)?

please help, i don't know how to answer those questions. i don't have a business. i just rent a house with the help of a realtor/property manager. it won't let me skip these questions, need to fix the errors.

Best answer by SantinoD

The amount in box 1 needs to be reported as rental income received. If the amount in Box 3 is also related to the rental, that should also be included as rental income.

Rental properties are usually treated as passive activities, and passive activities are excluded from the definition of a qualified trade or business. However, rentals that qualify as trades or businesses under IRC § 162 are not considered passive, which means they could potentially qualify for the QBI deduction.

So if your rental activities are not considered a qualified business, TurboTax shouldn't be asking those questions. I recommend going back to your rental income section and checking to see how you answered the questions.

To get back to the Rental income screen, follow these steps:

Open or continue your return, if you haven’t already
Locate the Search bar in the upper right of your screen. Search for rentals and select the Jump to link at the top of the search results
Answer Yes to the question Did you have any income from rentals or royalties?
On the next screen, Let's see if you're a real estate professional, select any options that apply to you.
On the screen What are you here to report?, select Rental property and Continue
- If you have more than one rental property to report, no problem—just start with one, and we’ll come back to the other one(s) later
On the following screens, we'll ask you to enter all the info we need about your rental property, including a description of the property, your rental income, any expenses and assets, and other less common situations about your rental
When you reach the Here’s your rental property info screen, double-check the info you entered to make sure everything is accurate and that you haven’t left anything out
Once you’ve entered all your info, you’ll be taken to the Your income and expenses screen
- If you have more rentals to enter, scroll down to Rental Properties and Royalty Income (Sch E) and select Edit/Add next to this line
- On the Your 2022 rentals and royalties summary screen, select Add another rental or royalty
- From here, follow these instructions again, starting with Step 5, and repeat until you’ve entered all your rental income

To see what rental expenses you can deduct, check this link: What kinds of rental property expenses can I deduct?

SantinoDAnswer

Alumni - Intuit

The amount in box 1 needs to be reported as rental income received. If the amount in Box 3 is also related to the rental, that should also be included as rental income.

To get back to the Rental income screen, follow these steps:

Open or continue your return, if you haven’t already
Locate the Search bar in the upper right of your screen. Search for rentals and select the Jump to link at the top of the search results
Answer Yes to the question Did you have any income from rentals or royalties?
On the next screen, Let's see if you're a real estate professional, select any options that apply to you.
On the screen What are you here to report?, select Rental property and Continue
- If you have more than one rental property to report, no problem—just start with one, and we’ll come back to the other one(s) later
On the following screens, we'll ask you to enter all the info we need about your rental property, including a description of the property, your rental income, any expenses and assets, and other less common situations about your rental
When you reach the Here’s your rental property info screen, double-check the info you entered to make sure everything is accurate and that you haven’t left anything out
Once you’ve entered all your info, you’ll be taken to the Your income and expenses screen
- If you have more rentals to enter, scroll down to Rental Properties and Royalty Income (Sch E) and select Edit/Add next to this line
- On the Your 2022 rentals and royalties summary screen, select Add another rental or royalty
- From here, follow these instructions again, starting with Step 5, and repeat until you’ve entered all your rental income

To see what rental expenses you can deduct, check this link: What kinds of rental property expenses can I deduct?

moogie2022Author

Level 2

SantinoD - if both box 1 & 3 are related to my rental then can i add both boxes together and report them as box 1? this method has no errors. otherwise if i report them as individual boxes then i get the prompt to enter business info.

i went back to check for accuracy, it's still prompting me to enter my business name even though i say no this is not a qualified business

SantinoD

Alumni - Intuit

It sounds like you are trying to enter this info in the 1099-MISC section. Since this 1099-MISC is related to your rental, you would not enter this info in this section. These amounts on 1099-MISC need to get entered into the Rental Income section only.

You will need to delete the 1099-MISC that you entered. To get back to that screen, follow these steps: