How do I handle 1099 Misc, I am Clergy and received the 1099 from a funeral home as a Nominee. the amount was turned over to the church?

[DianeW]

If the income was distributed to you because of a service you performed at the funeral home then you must report it as income.  Then take a contribution on itemized deductions on your personal part of the return.

If the money was actually intended for the church from the onset, then the funeral home should have put the church and their federal EIN on the 1099-MISC.  In this case you can nominee the income to the church.

There are several ways to accomplish this.  First report the income following the steps below as though it was in box 3.

1. Federal Taxes > Wages & Income > Other Common Income > Income from Form 1099-MISC > Update 
2. Edit > Continue (if all your information is there and the income is in box 3)
3. Type Description, Nominee Income
4. Continue > Check None apply
5. No it did not involve work
6. Select got it in 2016
7. No it didn't involve an intent to earn money
8. Finish

This will place the amount as a positive figure on line 21 as it should. 

Next, You can show a negative number in Line 21 with the caption, “Distribution to Nominee YYY, SSN xxx-xx-xxxx.”  The negative number on Line 21 will adjust the income of the reported payee to the correct amount.  The reported payee will issue a Form 1099-R to the nominee payee for nominee’s share of the distribution. 

You can enter a negative income adjustment with the following menu path:

1. Federal Taxes
2. Wages & Income
3. Less Common Income
4. Miscellaneous Income
5. Start
6. Other Reportable Income
7. Start
8. Other Taxable Income
9. Description = “Distribution to Nominee YYY, SSN (xxx-xx-xxxx) or EIN (xx-xxxxxxx)”
10. Amount = -$xxx

TurboTax will transfer this to your Form 1040, Line 21, Page 1.

You can e-file with this approach because the disclosure is on the face of the return at Line 21.  You can also e-file using the step below instead.