What is the name of your state (only U.S. law)? California
In 2008, I used the Small Claims Court system and I won the case from the defendant ($6000.00). I received the money already ($6000.00) and now in April 2010 I find out Uncle Sam wants 39% of this money. This was a case that I was seeking restitution of my own money, so this was neither an award nor income(so that is why I did not report this as income), because I just recovered money that was mine in the first place. So my question is: Why, when, and how does this happen, or should this even happen? Is it routine or legal for the judgement debtor to make the judgement creditor(me) fill out a 1099-misc form ? In this case I'm just receiving my own money back,NOT income,in this small claims case. So how does a 1099-misc apply to this situation, if at all?
In 2008, I used the Small Claims Court system and I won the case from the defendant ($6000.00). I received the money already ($6000.00) and now in April 2010 I find out Uncle Sam wants 39% of this money. This was a case that I was seeking restitution of my own money, so this was neither an award nor income(so that is why I did not report this as income), because I just recovered money that was mine in the first place. So my question is: Why, when, and how does this happen, or should this even happen? Is it routine or legal for the judgement debtor to make the judgement creditor(me) fill out a 1099-misc form ? In this case I'm just receiving my own money back,NOT income,in this small claims case. So how does a 1099-misc apply to this situation, if at all?
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