change 1099 Misc from business to self

[daisy]

I know I need more information, but I'm going to start by asking this, until I receive the rest of the info. I met someone at a party and he wants me to do his return for 2006. he said his company received a 1099 Misc for some work he did, but he said the 1099 Misc shouldn't have been assigned to his company, it should be for him personally, for some reason that i cannot remember, at the moment, there is no way he can get them to issue a new 1099 Misc in his name, so he wants to know how to move this 1099 misc from his company's name to his so he can put it on his personal return.

I guess his "company" has had no business or expenses for a couple of years and he's just getting rid of it. It's a computer consultant business.

Does what he's asking make sense? Does anyone know what he should do?

He should be sending me his stuff soon and i'll more info then.

Daisy

[TAXBILLY]

What is the entity of his "company"?

taxbilly

[RitaB]

I know I need more information, but I'm going to start by asking this, until I receive the rest of the info. I met someone at a party and he wants me to do his return for 2006. he said his company received a 1099 Misc for some work he did, but he said the 1099 Misc shouldn't have been assigned to his company, it should be for him personally, for some reason that i cannot remember, at the moment, there is no way he can get them to issue a new 1099 Misc in his name, so he wants to know how to move this 1099 misc from his company's name to his so he can put it on his personal return.

I guess his "company" has had no business or expenses for a couple of years and he's just getting rid of it. It's a computer consultant business.

Does what he's asking make sense? Does anyone know what he should do?

He should be sending me his stuff soon and i'll more info then.

Daisy

I have had a client with an LLC (I really hate those) who received a 1099 with his SSN which really belonged to the LLC (not single member so 1065 is filed.) Anyway, I entered the amount as gross receipts on a Sch C on his personal return, and then wrote a brief explanation on the first line of "other expense" and deducted the amount. The explanation said that the amount was properly reported on 1065 for FEIN # so-and-so.

I realize that you have the reverse here, 1099 issued to business but belongs on personal return, but maybe something along this line will work for you. It would actually be easier for you than to get the payer to issue another 1099 anyway, apparently. He should be filing the business entity with zeros anyway till he does a final return. Hope this helps. It did work for my guy.

[jainen]

>>received a 1099 with his SSN which really belonged to the LLC<<

I always have a disconnect about this situation. Where did the issuer get his SSN, unless he gave it to them as part of the work contract? Daisy's client (or party freeloader) must have represented himself as a business, and perhaps the job was only available that way. So the 1099's are most likely correct, and assigning them to another entity might be inappropriate. The issuer usually has a very good reason for not responding to the request.

Anyway, if the 1099 is wrong then showing it as income offset by expense is also wrong, since that mischaracterizes both income and expense.

[kcjenkins]

Well, hopefully Daisy will come back and tell us what sort of 'entity' his business is. That makes a lot of difference, because if it is a corp, there should not have been a 1099 in the first place, but if it was an LLC or a partnership, then it needs to be reported on the entity return, even if it is then zeroed out and reported on his return. I'd also want to know 'why' the income should not belong to the entity, because the reason he gives will often determine my answer. Without knowing both these things, I could not answer the question.

[daisy]

Unfortunately, I don't know what entity it is, that's one of the questions I asked him the other day, when I left him a message. I told him that would make a difference in how it can be handled.

Jainen, I watch out for party freeloaders, by not giving answers at parties, I always say, send me your stuff and I'll look into it and let you know if I will do it. He's a good client's brother.

I'll come back with more info when I get it, I expect by next week sometime. Thanks everyone!

daisy

[JohnH]

We will all be interested in hearing what you find out from this client. Could be a legitimate reason for his wanting to switch the income to his personal return, but there could also be a host of nonlegitimate reaons involving everything from simple misunderstandings all the way up to blatantly illegal business practices.

BTW, my practice has always been to feely give advice at parties, church, on the phone, etc. It has resulted in plenty of new business and enhanced friendships along the way. I find people to be genuinely appreciative and I think it pays off tremendously. The key is to know when to say "we're getting into territory that's too complicated for an off the cuff discussion and we need to meet at my office". I'll tolerate the few freeloaders I encounter because they are irrelevant when compared to the many benefits derived from sharing information when it's appropriate.