Not report 1099G on 1040

Forum|Forum|3 years ago
February 17, 2023
1 reply
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I filed 1065 for my rental home. Last year I got rental assistance money from local government and received 1099G for that. 1099G is to my SSN. I want to report the money in my 1065 not in my 1040. How can I do it?

JosephS1

Level 8

Is your 1065 for a Single Member LLC (SMLLC)? Your question seems to indicate you are the only partner which would lead me to believe it is a SMLLC. A 1065 would have to have multiple partners to be considered a true partnership. If it is a SMLLC please be advised that it is considered a disregarded entity by the IRS and the income and deductions for the SMLLC flow to the owner's 1040.

If there are indeed multiple partners and the income needs to flow to the 1065, I possibility is requesting a corrected 1099-G by the issuing governmental agency. If that is not an option you should claim the 1099-G income on Schedule E of your 1040 and then deduct the same amount under other deductions. Be sure to label the amount flowing to the 1065 adequately with perhaps the caption "1099-G received in error, entered on Form 1065, EIN XX-XXXXXXX".

@Jxu98

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Jxu98Author

Level 2

Thank Joseph for your very informative reply. It's not a SMLLC, but a 2 member LLC. Since the 1065 includes other properties and we have filed 1065 for many years for the rental business, so it is preferred that we keep filing 1065 for this property.

I like your solution that I claim it in schedule E and deduct the same amount at the miscellaneous expense. My question is: since the 1099-G income is input in Schedule E as rental income, not in the schedule 1 under Other Income (taxable grant in 1099-G), may IRS thinks that I did not report the amount in 1099-G? Will this increase the chance to be queried or audited?

Thank you so much for your help!

JosephS1

Level 8

I see your problem more clearly now. My suggestion as to the best way to handle this is to first list the grant as a taxable grant under other income from the 1099-G and fill out the information requested. Then when that is complete and you are back at the summary of income page, scroll down to the bottom to where it shows "Less common income", click on "show more", and click on the bottom link for "other reportable income" and click on "Start".

The next screen will ask if there is any other taxable income so click "Yes". Enter the description along the lines of "1099-G received in error" or something similar, enter as a negative number (-1200 or similar whatever the amount is) the amount shown on the 1099-G at your name and click continue, then done.

The amount shown on the 1099-G will now have been entered as income and deducted as received in error. Your overall income summary should show the negative amount at the bottom.

@Jxu98

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