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fisheka
Level 1

I rec'd no 1099MISC for Royalty pmts for use of my patent, although I rec'd both $10k cash and 10k in fully vested stock in lieu of cash. How to insert into TT Deluxe?

Last year I received a 1099-MISC for the cash I received for the Royalty payments (Box 2 Royalties).  I know that the $10k in cash still needs to be reported as business income on my Sched C; do I just say "no" to 1099MISC and eventually enter the business income?  What about the "stock in lieu of cash"?  How do I enter that into TT Deluxe?  The stock is from a very small, start-up corporation and I still have it today if that makes a difference.

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Accepted Solutions
MichaelMc
New Member

I rec'd no 1099MISC for Royalty pmts for use of my patent, although I rec'd both $10k cash and 10k in fully vested stock in lieu of cash. How to insert into TT Deluxe?

You are correct. Even without a Form 1099-MISC, you still must report all business income.

As you proceed through the TurboTax interview, under Wages & Income, indicate that you have income for which you did not receive a Form 1099-MISC. You will be directed to enter a description of the income and the amount.

The stock that you received as payment must be valued at its FAIR MARKET VALUE on the date received. It is often difficult to obtain a market value for stock in a start-up corporation, especially if there is a small or nonexistent secondary market. If the company is still in the process of selling shares to investors, it may be that the subscription price is the best indicator of FMV.

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1 Reply
MichaelMc
New Member

I rec'd no 1099MISC for Royalty pmts for use of my patent, although I rec'd both $10k cash and 10k in fully vested stock in lieu of cash. How to insert into TT Deluxe?

You are correct. Even without a Form 1099-MISC, you still must report all business income.

As you proceed through the TurboTax interview, under Wages & Income, indicate that you have income for which you did not receive a Form 1099-MISC. You will be directed to enter a description of the income and the amount.

The stock that you received as payment must be valued at its FAIR MARKET VALUE on the date received. It is often difficult to obtain a market value for stock in a start-up corporation, especially if there is a small or nonexistent secondary market. If the company is still in the process of selling shares to investors, it may be that the subscription price is the best indicator of FMV.

View solution in original post

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