Received 1099-NEC as a Beneficiary

[LGDESIGN]

As the beneficiary of renewal insurance commissions, I recieved a 1099-NEC. The insurance company would not change the 1099-NEC to a 1099-MISC even though the agent that made the original sale is deceased. I am retired and do not have a business. How do I enter this income on Turbo Tax Premier 2024?

Thank you for your assistance.

[ThomasM125]

You should enter the Form 1099-NEC in the Wages and Income section, then Other Common Income, then Income from Form 1099-NEC. When asked, indicate the money was not related to your job, that you didn't receive it in the previous or following year and you did not have a profit motive for it and it will be entered as other income as opposed to self-employment income.

[LGDESIGN]

ThomasM125,

Thank you for your response.   After I enter the 1099-NEC information, the next set of questions asks "Does any of these uncommon situations apply?"  One of 5 the statements is "This is not money earned as an employee or self-employed individual, it's from a sporadic activity or hobby (this is not common)".  Although only the first half of this statement applies to me - should I select this statement or "none of these situations apply to me?"  Either way I end up having to include Schedule C and pay self-employment tax. I do not understand how to get this income identified as other income as you suggest below. 

Help with this would be much appreciated.

With Kind Regards.

[dmertz · Accepted solution]

I assume that the form is in your name, not in the name of the decedent.  You can enter it as Miscellaneous Income -> Other reportable income.  This will place it on Schedule 1 line 8z where it belongs as if it had been properly reported on Form 1099-MISC, but allowing you to provide your own description of the income instead of forcing a description that says that it came from a Form 1099-MISC.

There is still a chance that the IRS will question this income since it was reported on Form 1099-NEC instead of Form 1099-MISC on which it should have been reported.

[LGDESIGN]

DMERTZ,

I appreciate that your answer gives me the option of entering the income in another way because the form is in my name.  If I was more of a risk taker I would try this. Thank you for helping me make a decision on what to do.

With Kind Regards