Nike 1099M to coach

[DPen]

New client receives a 1099M with box 7 income for the value of Nike clothing received while employed as a university coach. Client says they have received this income while at various universities over the years. My inclination says Sch C with S/E but client says prior preparers have always reported as "royalties" on line 21 with no question from the IRS. Has anyone had experience with this?

Many thanks.

Denise

[BP.]

Welcome, Denise. Have a client who had similar situation several years ago. She was employed in a dept. store and got a 1099-Misc from one of the manufacturers whose clothes she sold, for the value of clothing she received from the mfr. We used line 21, but not the notation "royalties," just "1099-Misc." Was usually for about $1,500 or so. Honestly, don't know if this was right, wrong or whatever, but it flew through.
Barbara

[DPen]

1099M to client

Thank you, Barbara. Do you recall if the income was in box 7?
Denise

[DonPriebe]

Sounds similar to the payments that auto salesmen get from the manufacturer for meeting sales goals. These are also reported in box 7 of a 1099-Misc. They go on line 21 as other income, and are NOT subject to SE tax.

http://www.irs.gov/pub/irs-pdf/p3204.pdf

[AJsTax]

That is good information,

DonPriebe; I have a few tire saleman that receive the incentives from the manyfacturer. We have always shown this on Sch C with SE paid. the reason it is in Box 7. If not subject to SE, by CODE, it must be shown in box other than box 7. They are in the business of selling tires...
But the pub from the IRS says otherwise, so I will have to amend many, many returns because the manufacturer can not fill out a 1099 correctly.
I searched for that info many times and never found that one
Thank you!!!

[BP.]

Yes, Denise, box 7. Sorry, I meant to mention that in my post, as I thought you'd find it relevant. Agree w/DonPriebe's analogy for auto salespeople.