How to Report ?

[Dave T]

Client has a business of helping place foreign exchange students.  She works with several agencies to do so and receives 1099_Misc. I've reported this and related expenses on Sch. C with offsetting expenses of mileage, etc.

In addition, she hosts students in her own home and receives a monthly stipend for doing so and also receives a 1099 for the stipend amount at year end.  I am trying to determine how to report this income. I believe it should be shown as Other Income and not subject to S/E tax.  IRS allows a $ 50/month charitable deduction but have read where some take offsetting expenses such as food, % of utilities. etc.

Any guidance would be appreciated.

Dave T

 

 

[Max W]

If it is one time, or sporadic times this is done, I would use Line 8 Sch 1, other income (the Old Line 21).  However, your client is doing it on a regular basis and actively looking for students, so Sch C, which you are doing.    The IRS says you expense books, tuition, food, clothing, transportation, medical/dental and recreation.

Things that can't be expensed include FMV of room rent, Depreciation, taxes, mort. pmts.

The student has to be grade 12, or lower and be sponsored by a NGO.  Also, it can not be an exchange student where the host family also has a student in a mutual exchange.

Some on-line opinions are that it is Other Income, but with the elimination of 2% misc, it might be better to go with Sch C anyway, if there a lot of expenses.