How do I report 1099-MISC investment income that is not from employment but is from quarterly interest payments on structured notes held in a joint brokerage account?

[KREC]

I had the same issue when going through the Turbotax questions. One of the experts on here suggested, when answering the questions regarding whether you have received this income in the past, or expect to receive it in the future, answering no to both.

[GeorgeM777]

You have two options to enter your 1099-Misc as other income (that is income not associated with self-employment).  After selecting Miscellaneous Income, you will see other options, select Other reportable income.  On the screen where you enter a description and the amount, you may see information indicating that a 1099-Misc should not be reported in this section.  Ignore that statement and continue through the application.

The other option is to report your 1099-Misc in the section Other Common Income.  Other Common Income has an option specifically for Form 1099-Misc.  There are a few more screens to work through here versus the Less Common Income section; however, the screen(s) are more closely aligned with your Form 1099-Misc.  Please note that when working through the Other Common Income section, you will see a screen asking whether your 1099-Misc represents an intent to earn income/money, and while it may seem counterintuitive to select No, that is the response you need to select.  If you select Yes, TurboTax will report this income as self-employment income.  

Either of these options will produce the result you want.  Although the latter option has a few more screens.  Your 1099-Misc income should appear on line 8 of Form 1040. 

@sjmuck 

@KREC 

[sjmuck]

Sorry, but this is not computing...

The 1099-MISC data was downloaded from my financial institution, and populated the Turbotax 1099-MISC Box 3 (other income); no other boxes had info.

Next screen asks for Reason - I enter "Investment Income".  The help link regarding income for something other than a job was useless

Next screen has the 'Uncommon Situations'.  None of these relates to this income, but if I do check a box like 'Legal Settlement', it does the job in terms of putting the income in Other Income, not a Schedule C.  But I'll check 'None of these apply'.  Also check 'No' on if it had anything to do with past wages.

Next screen - there is no other 1099-Misc.  

Next screen shows summary of Miscellaneous Income

If I go to print preview the Schedule C, the income shows up there, not on Schedule 1 - Other Income.

I don't see any other way other than to pick a 'Uncommon Situation' like Legal Settlement, so it flow thru to the correct form.

[sjmuck]

To continue, the options for entering (1099 and other Common Income0 screen are all tied to forms such as MISC, Misc income are all tied to forms like 1099-G, 1099-K, etc.  No option for entering income other than those forms that don't apply here.

[KREC]

Did you say no to both questions of whether you received this income in past and whether you would receive it in future?

[MarilynG1]

Yes, other income can be reported that is not tied to any form.  Sounds like you need to Delete Schedule C from your return.  If you report as 'Miscellaneous Income' and check the box for 'None' under 'Uncommon Situations' the amount will flow to Schedule 1, Line 8z and Form 1040, Line 8.

Under Wages & Income, scroll all the way down to Miscellaneous Income, 1099-A, 1099-C.  On the next screen, scroll all the way down to Other Reportable Income.

If you have your 1099-Misc entered anywhere else, delete that entry.

@sjmuck 

[sjmuck]

Yes, I tried checking last year and this year (the truth), and then unchecking everything.  Same result - income is reported on a Schedule C.

[sjmuck]

The issue is that this income IS tied to a 1099-Misc form as downloaded from my financial institution.  I would think I would absolutely need to report it as a 1099-Misc income....

[DaveF1006]

The question is where did your 1099 MISC download to? Did it populate into Schedule C or elsewhere.  If it populated in Schedule C, then i would delete it in that section. Also i would delete Schedule C from my list of forms.  

if using TT Online, go to the black left panel in your return and go to tax tools>tools>delete a form. Delete all Schedule C's and worksheets that are associated with it. If using desktop, go to the forms mode and delete Schedule C and the worksheets if these are there. Now sign out of your return and back in again (if using online) so the forms won't stick. This is recommended for desktop also so the changes will be made. If in desktop, be sure you save your return when it asks.

Now the proper way this is to be reported is go to 1099 MISC and other common income section in your wages and income section>income from form 1099 MISC. If this is where this is reported, great!! Half the battle is won.

Now answer the questions carefully. This is critical.  

1. After the 1099 MISC is recorded state the reason for the 1099 MISC
2. Select none for the uncommon reasons apply question
3. Did this involve your main job? no.
4. indicate you got this in 2022. If you indicate you received it prior or if you expect in 2023, then a pattern is developing that may trigger a Schedule C.
5. Did you intend to make money? no
6. Do you have another 1099 MISC? No
7. Then there will be a screen that notifies you that you may qualify for business deductions, continue past that.

if you have answered the questions in the prescribed manner and deleted the Schedule C and worksheets, you will see the income posted in Schedule 1 line 8z. it worked for me as i tested this just to make sure that it worked.

@sjmuck 

[sjmuck]

OKAY, THANK YOU!

First, whether a Schedule C is produced or if the miscellaneous income flows to the 'other income' line as it should, depends on the answers to the questions in the 1099-MISC section.  As soon as you change the answers, a Schedule C will be produced or it will be deleted (you don't need to affirmatively delete the Schedule C..) I thought I had tried every variable.  What works (does not produce a Schedule C) is if you either:

- choose something other than 'Other'for the uncommon reasons (which was my first working option), or

- do what you suggested and only pick ONE year, the current year 2022, veresus putting a checkmark in the prior year or next year (I actually had this income in the prior year, but I give up trying to be truthful)

[AmyC]

Your honesty is appreciated but that question does not go to the IRS. It is just the programmers trying to direct your income to the right spot. If you make money doing the same thing every year, you have a side hustle. 

You do not have a side hustle so this is not sch C and the program must be told what to do by choosing that it is a one time event.

[danar3]

Hello wmsrd04096

None of the answers to your question are adequate. The only way I know how to report structured investment proceeds from a 1099-MISC is to get out of "Step-by-Step" (as quick as you can - I wasted a LOT of time there) and switch to Forms. Then choose Form 1099-MISC  enter the amount you received in Box 3. Do not select any of the "suggested" forms (i.e. Sch. C, Sch. F, or Form 4835), but select "Other Income" from the list that follows (below) the three (dangerous) suggestions. Your 1099-MISC will now show up on Schedule 1, line z, "Other Income" where it is supposed to be.