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02-02-2018 08:48 PM
I receive rent credit - around $200/month. In exchange the landlord provided me a list of activities that I need to do in the building (cleaning etc). For this rent credit I received a 1099-MISC form (only box 7 with amount). I'm trying to enter this form on H&R Block online filing system. It follows up with questions like I am a business or something. First question : the form I received is the correct one ? And 2nd question : How do I file this amount as income ? Thank you
02-13-2018 10:22 AM
Welcome to the H&R Block Community.
According to the facts you have provided, it seems you received a 1099-MISC to reflect a bartering exchange were you provided a service to the landlord in exchange for free rent or a rent credit as shown on your Form 1099-MISC. According to the tax rules, "taxes Income from bartering is taxable in the year it is performed. Bartering may result in liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss." Also, "reporting the rules for reporting barter transactions may vary depending on which form of bartering takes place. Generally, you report this type of business income on Form 1040, Schedule C Profit or Loss from Business."
If you were performing a service over a period of time in 2017 in getting a 1099-MISC that shows $200 per month of this rent credit, then it will have to be reported on "Schedule C - Profit or Loss from Business." Even though receiving a Form 1099-MISC for the rent credit in exchange of providing a service to the landlord is not actually a business, the Schedule C needs to be filled out as a self-employment activity. Therefore, the information on Form 1099-MISC, such as the dollar amount on box 7 (nonemployee compensation), needs to be reported on Schedule C.
If you have any other question, I'll be glad to help.
Tax Research Specialist