Re: My client volunteers for a non profit. she never got paid. They gave her a house from property owned by the non profit. Should they give her a 1099 for the price of the house? If so how would they...
My client volunteers for a non profit. she never got paid. They gave her a house from property owned by the non profit. Should they give her a 1099 for the price of the house? If so how would they claim it on their tax return?
They want to give her a 1099S. That is not right because they did not sell a house. If the house is worth 400000. She would have to claim 400000 as earned income and pay self employment tax on it. Could they give her a 1099 and she could just claim as an asset.
It's a gift if it's a turkey at Thanksgiving. Not a house. Given in connection for her services, so the value of the property is compensation.
There is leeway to regard this as 'other income' since she's not in the trade or profession of providing her services to the charity (admin work for example) and then not subject to s/e tax. Likely disagreement on this point, but I'd disclose the position taken and put as not subject to s/e tax.
Something odd if the charity is giving her a house. What do you mean by 'allocate the depreciation?' Did a donor give the house to the charity, or does the charity run it for rental purposes such as parents needing to stay near hospitalized children? Why did the charity give it to her? How many years did she volunteer for them to have them do this? Unusual I'd say!
"There is leeway to regard this as 'other income' since she's not in the trade or profession of providing her services to the charity (admin work for example) and then not subject to s/e tax."
But hold the phone. How do you know that? Maybe the house lady has a consulting business and part of that consulting is making nonprofits so happy that they give away $400,000 houses.
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.
