jim@lwr Posted February 18, 2008 Report Share Posted February 18, 2008 A client received a 1099-Misc from Walgreens reporting 13 months payments. A letter separately sent explained that "For 2007, we switched from a cash-basis to an accrual-basis method of reporting rental income payments, as permitted by the rules and regulations of the IRS. Consequently, this Form 1099-MISC includes 13 months of rental income, the 12 payments for 2007 plus the January 2008 payment. From a tax payment perspective, the inclusion of the January 2008 rental income on your 2007 Form 1099-MISC should not accelerate the payment of tax. The tax on the amount reported to you as January 2008 rental income must be paid in April 2008 regardless of whether it is included in your 2007 income tax return or in your 2008 estimated quarterly tax payment." Has anyone ever heard of the "rules and regulations" that allow the reporting of payments on an accural basis? Thanks for your help. Quote Link to comment Share on other sites More sharing options...
GeorgeM Posted February 18, 2008 Report Share Posted February 18, 2008 As the taxpayer is on a cash basis, I would report only 12 months rent. You can include a statement to the IRS showing the Walgreen's letter. Furthermore I believe that Walgreen's is incorrect reporting their accrual on a 1099, I wonder if they include their accrual on their W2 forms also Quote Link to comment Share on other sites More sharing options...
jim@lwr Posted February 20, 2008 Author Report Share Posted February 20, 2008 Thank you, George. With all of Walgreens resources, I thought they couldn't possibly be wrong, but I agree with you that they are. I understand that you can accrue an expense...but to "accrue a payment" makes no sense to me. Quote Link to comment Share on other sites More sharing options...
lbbwest Posted February 21, 2008 Report Share Posted February 21, 2008 Thank you, George. With all of Walgreens resources, I thought they couldn't possibly be wrong, but I agree with you that they are. I understand that you can accrue an expense...but to "accrue a payment" makes no sense to me. My son works for an international company, his W2 was incorrect as he received an "auto allowance" which wasn't taxed, with no reporting requirements. Their policy has subsequently been changed to comply with IRS reporting requirements. Big companies always doing things correctly is an outdated urban myth. Enron, Arthur Anderson, State of Michigan, BDO Seidman, need I go on? lbb Quote Link to comment Share on other sites More sharing options...
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