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"Move-In Special" check taxed??

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Onyx06

Junior Member
I live in Kentucky

In early 2007, I signed a one year lease for my apartment. As an incentive for doing so, I received a "Move-In Special" check in the amount of $1800. Several days ago I received a 1099-MISC form from the rental company. On the 1099-MISC this $1800 is listed in box 7 as "Nonemployee compensation." This does not make any sense to me because I did not do any work for them. It was essentially just a check which reduced the total rent I have paid to them over the past year.

Are they correct in reporting the "Move-In Special" check in this way? And what do I need to do to report this correctly on my own tax forms?
 


JETX

Senior Member
It was essentially just a check which reduced the total rent I have paid to them over the past year.
Interesting spin, but of course not true. The check was just what it claims to be.... CASH incentive for you to move in.

Are they correct in reporting the "Move-In Special" check in this way?
In my opinion, yes.

And what do I need to do to report this correctly on my own tax forms?
Simply report it as income on line 21 of Form 1040.
 

irsos

Member
Interesting spin, but of course not true. The check was just what it claims to be.... CASH incentive for you to move in.


In my opinion, yes.


Simply report it as income on line 21 of Form 1040.
That is the correct place to report it, the problem is, they put the amount as nonemployee compensation, which will trigger a CP-2000 notice for self-employment tax. They should have put the amount in box 3.
 

Onyx06

Junior Member
Thank you for your responses.

Does this mean that I need to contact them and get them to correct my 1099 and put this amount into box 3?
 

LdiJ

Senior Member
Thank you for your responses.

Does this mean that I need to contact them and get them to correct my 1099 and put this amount into box 3?
Its appropriate that they are treating the "move in special" as income to you. Its completely and totally inappropriate that they are reporting it in box 7 as non-employee compensation. As IRSO said, it belongs in box three, as other income.

It makes no difference to them, tax-wise, if they report it in box 3, but they may not understand that, and may not be very cooperative about making the necessary change. You need to make ALOT of noise with them about this....and you need to do it rapidly, because they have time to make the change now without any ramifications to them, (other than hassle) even if they have already transmitted or sent the 1099's to the IRS.

If they don't given you a corrected 1099, then you need to report it as other income yourself, and pull together all of the documentation/proof that you can, so that you can present it to the IRS when you receive the inevitable CP2000 letter.
 

Onyx06

Junior Member
Thanks again to everyone who responded!!

I contacted the rental company today and they said they will correct my form and move the amount to box 3! Plus, it will be corrected before they send it to the IRS!

:D
 

LdiJ

Senior Member
Thanks again to everyone who responded!!

I contacted the rental company today and they said they will correct my form and move the amount to box 3! Plus, it will be corrected before they send it to the IRS!

:D
I am glad that we were able to help!
 

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