SE Tax ?

[Art]

Client, a retired laborer did a small repair project for a local bank. The bank issued a 1099 MISC for $ 4650.00 showing the amount in box 7 non employee compensation. This was the only job he did during the year. He has not worked for many years and has not done “side jobs” in the past. I did not see any choice but to report this as SE income. Any thoughts to the contrary?

[thomtax]

In a situation such as this with this much money involved, I also feel it should be sch c and se. Someone may argue that since it is a one time deal, it should be line 21, but I am not comfortable with that treatment.

LT

[solomon]

Sure. Line 21. Look up Batok vs Commissioner. The downside is that expenses must go on Sch A Misc.

[Gretel]

Sure. Line 21. Look up Batok vs Commissioner. The downside is that expenses must go on Sch A Misc.

I have something similar with a 16-yr old student. Received 1099-Misc from agency for a job with disabled person, around $5,000. She did it pretty much all year but never did before and never will do again. I think she is out of luck because of continuity and not just summer job, right?

[solomon]

I have something similar with a 16-yr old student. Received 1099-Misc from agency for a job with disabled person, around $5,000. She did it pretty much all year but never did before and never will do again. I think she is out of luck because of continuity and not just summer job, right?

I think your are correct. Profit motive in of itself does not make it a trade or business but that with actively and regularity does make it so.

[Art]

Sure. Line 21. Look up Batok vs Commissioner. The downside is that expenses must go on Sch A Misc.

Thanks for the site. Looks like we can make this argument if the IRS tries to assess SE tax.