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1099 MISC with the wrong Recipent TIN

Poltax75
Level 3

My Client received a Legal Settlement for destroyed Lab facilities associated with his LLC.

The settlement was issued to his personal TIN on a 1099-Misc with box 3 showing the amount.

He has legal fees associated with the settlement paid by his LLC

Can I show the 1099 MISC on Schedule C with an explanation?

May not be able to get a new 1099-Misc with the correct information.

Thanks

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16 Comments 16
BobKamman
Level 15

Why not just attach the explanation without the Schedule C?  Playing games like "Trick the IRS Computer" by adding to gross income may trigger an audit when the algorithm looks just at receipts, not deductions.  

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qbteachmt
Level 15

Another one? How many clients do you have whose lab equipment was damaged?

From July:

https://accountants.intuit.com/community/practice-advice/discussion/client-s-llc-received-a-mutually...

Now I understand why TV shows such as CSI show lab techs in the field with guns. Protecting the sampling devices.

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Poltax75
Level 3

Schedule C has other deductions and Income . Could I just add the 1099-MISC as other income on schedule 1 line 8 z and the legal expenses on Schedule C?

But this creates a miss match of income vs expenses ?

Lots of labs in Massachusetts

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qbteachmt
Level 15

Where is the mismatch?

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sjrcpa
Level 15

Are you (not) saying the LLC files as a partnership or corporation?


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abctax55
Level 15

Just curious.... what *kind* of lab 😉

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BobKamman
Level 15

Maybe this kind?lab.jpg

abctax55
Level 15

Awwwwwwwwwwwww....... Labs are my favorite.  Juno is only 17% lab, despite coming from a Lab rescue organization.

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sjrcpa
Level 15

Looks like my dear, departed Bear.


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BobKamman
Level 15

I'm trying to figure out how ancestry, of dogs or humans, can be 17%. Or let's say, 1/6.

I could understand 1/4 or 1/8.  One of the grandparents, or one of the great-grandparents, belonged to that breed.  

I suppose if 11 out of 64 ancestors in the 6th previous generation are labs, that works out to 17%.  

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abctax55
Level 15

I have her DNA test results.

Mom was 100% pure-bred GSD.

Dad got around a bit....

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Poltax75
Level 3

 I need to file a Schedule C or the LLC,

But I have a 1099-Misc associated with the LLC'S business however the TIN is for the individual and not made out to the LLC EIN.

What's the best solution?

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Poltax75
Level 3

The income would be on Schedule 1, the legal expense would be on schedule c.

Is that a problem

The net result is almost the same except for self employment taxes

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Poltax75
Level 3

The  LLC is filed on a Schedule C .the LLC has it's own EIN .

The Schedule C is filed with the clients tax return so it eventually all rolls up under his SS#

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sjrcpa
Level 15

Much ado about nothing.

Include the 1099-MISC income on the Schedule C the LLC is already filing.


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qbteachmt
Level 15

Oh, now I understand where you see a mismatch. Yes, that is Wrong. You can't claim it as business expense and not claim the income as business. Unless there is some personal injury settlement?

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