1099 Misc Box 8 Income

Forum|Forum|4 years ago
July 27, 2022
6 replies
66 views

In 2021, I received a 1099 Misc with income in Box 8. I also paid investment interest in 2021. I noticed the amount of income in box 8 was not included on Form 4952 on line 4a. I think it should be and am curious why it isn't. Thanks for your help!

Kind regards,

Chris

James-B

Level 4

Hi @DefenderCSW

Thank you for this question! When you receive an amount in box 8, it represents Substitute Payments in Lieu of Dividends or Interest. The result is you are receiving a payment in place of a dividend or interest, which is taxed at ordinary rates. On the back of the 1099-Misc you will see instructions for box 8 that reads “Box 8. Shows substitute payments in lieu of dividends or tax-exempt interest received by your broker on your behalf as a result of a loan of your securities. Report on the “Other income” line of Schedule 1 (Form 1040).”

I’ve found a related article for these types of transactions that I think you will find interesting and pasted it below. It discusses how these types of payments come into being and the impact on your taxes.

What Is a Substitute Payment in Lieu of Dividends? | The Motley Fool

Thanks again and have a great day!

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DefenderCSWAuthor

Level 2

Hi @James-B ,

Thanks for the prompt reply - I appreciate it. I understand why there is an amount in Box 8 of the 1099 and also where it gets reported on the 1040. What I am curious about is why is the amount from box 8 of the 1099 not included in the amount shown on line 4a of form 4592?

Thanks again for the reply!