Income on tax return

[loadmaster]

What is the name of your state (only U.S. law)? CA
Hello,
I was out of work and needed to retain an attorney for a court matter. An associate of mine paid the attorney directly in exchange for labor I did on his home. Do I have to claim the amount paid to the attorney as income on my tax return? Thank You.

 

[LdiJ]

What is the name of your state (only U.S. law)? CA
Hello,
I was out of work and needed to retain an attorney for a court matter. An associate of mine paid the attorney directly in exchange for labor I did on his home. Do I have to claim the amount paid to the attorney as income on my tax return? Thank You.

Yes, its self employment income. You would file it on Schedule C.

 

[loadmaster]

Yes, its self employment income. You would file it on Schedule C.

OK thank you. It doesnt look like I will be able to work off the whole amount, I will actually have to pay him back about half. The amount was $50,000, so we figured I worked off 25 and will pay him back 25. Do I still put the entire 50 on the return? Thank you for your help.

 

[tranquility]

I'd say no. You only gained $25K in wealth from your work. However, if things transpired between a couple of years, the actual facts would have to be more clear. In that case it is possible the full $50K is put on the return one year with $25K deduction in the other year.

Even then, although not precisely correct in some instances, I'd put the $25K as income and treat the other $25K as a loan.