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Repayment of Royality

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    Repayment of Royality

    Client received a 1099 misc for royality income in 2004.After taxes were filed client received a letter from the comapny stating that they had been overpaid and to send back a check for the overpayment amt.No corrected 1099 misc was issued.I have taked the repayment on Sch E as a deduction.Is this correct or would this be a Sch A subject to 2% limitation

    #2
    If it was originally reported on Schedule C as business income, subject to SE tax, then in a following year, you would take it as an expense, line 2, returns and allowances.

    If it was not originally reported as business income, then it is a Schedule A deduction.

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