Nellie Posted February 16, 2014 Report Share Posted February 16, 2014 Taxpayer inherited a horse farm and sold everything as quickly as he could with the exception of the buildings and land which were rented after all the horses were sold in 2011. He received over $45,000 in breeder awards (box 3 of 1099 Misc) for 2013. I know this is taxable but do I put it on line 21 or on Sch F and pay SE tax. The taxpayer lives in Florida and the horse farm was in Louisiana. Any help appreciated. Quote Link to comment Share on other sites More sharing options...
glgcpa Posted February 17, 2014 Report Share Posted February 17, 2014 This is opinion only, not from resarch, but I would put on line 21. The reason I would is that the client was never in the horse breeding business, and , in fact, inherited the right to receive the awards, and did nothing to " earn" the awards. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 17, 2014 Report Share Posted February 17, 2014 I agree. I consider this passive income. He isn't in business. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 17, 2014 Report Share Posted February 17, 2014 Line 21, no SE. Passive income. Quote Link to comment Share on other sites More sharing options...
Mr. Pencil Posted February 17, 2014 Report Share Posted February 17, 2014 Line 21, no SE. Passive income. I agree it goes on Line 21. It reminds me of inherited book royalties. These would have been SE income for the author, but the heir is not conducting a trade or business. Therefore "passive income" is not the right description, because that refers to a business activity. For example, it could not be used to offset passive losses from a rental activity. Quote Link to comment Share on other sites More sharing options...
Nellie Posted February 17, 2014 Author Report Share Posted February 17, 2014 Thanks for confirming my thoughts. This will make this client a happy camper!! Quote Link to comment Share on other sites More sharing options...
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