TT is moving inherited SAG AFTRA residual income reported on 1099-MISC to the Business section

[kcellis]

My late sister was an actor and I'm still getting inherited residual payments that are hers from SAG AFTRA. Turbo Tax wants to move the income to the business section. It's not a business--it's an inheritance.

Last year's payments were reported under the 1099-MISC section and I remember that I had to do something special to ensure that the income was reported as 1099-MISC, but I don't recall what it was. 

Can someone please refresh my memory? 

[SharonD007]

You can enter the income as “Other Income” so it won’t be subject to self-employment taxes.  Follow the steps below:

1. Open TurboTax
2. Select Wages & Income
3. Scroll down to Other Common Income and select the down arrow
4. Select Start next to Form 1099-MISC
5. Select Yes to Did you get a 1099-MISC?
6. Follow the prompts to enter your 1099-MISC
7. Enter the Inherited Residual Payments to Describe the reason for this 1099-MISC
8. Select None of these apply to Does one of these uncommon situations apply?
9. Select No to it didn’t involve work like your main job
10. Select Got it in 2023 to How often did you get the income?
11. Select No to Did it involve an intent to earn money?

For additional information, review the TurboTax articles

1. ?

For additional information, review the TurboTax articles What's the difference between self-employment income and other income?

and Where do I enter a 1099-MISC?

[kcellis]

Thank you for the reply. 

Yes, that is how I entered each of the 1099-MISC forms. When I run the Smart Check at the end, I get an error for each of the 1099-MISC forms that I've entered.  For Box 3, TT wants me to select either Schedule C, Schedule F, or Form 4835 for reporting the income. The income isn't from a business or from a farm, or any of the other options. 

Should I be selecting "Other Income" on schedule F? 

[SharonD007 · Accepted solution]

No, don't select Other Income on Schedule F. That's for Farm Income.  Delete the 1099-MISC and start over by following the instructions below.

To delete 1099-MISC:

1. Open TurboTax
2. Select Wages & Income
3. Select Review by Self-employment income and expenses
4. Delete the 1099-MISC for your inherited residual income.

Follow the instructions in the post above to re-enter the 1099-MISC. When you get to How often did you get income for Inherited Residuals? Screen, select that you got it in 2023.  If you make any other selection, TurboTax will treat the income as self-employment income because you receive it on a continuous basis.  If you indicate that you only received it in 2023, TurboTax will enter the income as Other Income, and it will appear on line 8z on Schedule 1. See the screenshots below:

[kcellis]

Thank you! That fixed the issue. Sorry it took so long to reply. I was out of town and away from the computer with my tax files on it.