How Would You Do This?

[SueBaby]

First of all Question??
A client wants me to amend a 1099 but his boss will not split it up. In box #7 is $35,000 and half is his rent for truck and tools that needs to go in box #1.

I can't (do I) amend it his boss has too ---right?

If they do amend it do I send the 1099 plus 1096 plus his return all together in to IRS?
I have alot of 1099s to file but never to amend one.

don't know about this one what is the right thing to do.

[Jiggers]

1099 is correct

The income for the labor AND the rent of personal property such as a truck and tools goes on Schedule C.

The rent of the personal property does not get reported on Schedule E.

[PIGLEE]

Agree with Jiggers. I have many sub contractors and have researched it many times. Tool and Truck rent (.personal property rents) go on Schedule C.

See The Tax Book page 7-5, "Rental of Personal Property".

It is a game that Prime contractors used to play, but I don't hardly see it any more.

[SueBaby]

The income for the labor AND the rent of personal property such as a truck and tools goes on Schedule C.

The rent of the personal property does not get reported on Schedule E.

oh good glad to hear that. His agi from $35,000 is down to $9,027; which to me did not look good. And NO receipts along with it either which looks even worse. So guess it is okay to send like that? ?

I am afraid of a horrible audit with this one. What would you do with it? Thanks

[ChEAr$]

oh good glad to hear that. His agi from $35,000 is down to $9,027; which to me did not look good. And NO receipts along with it either which looks even worse. So guess it is okay to send like that? ?

I am afraid of a horrible audit with this one. What would you do with it? Thanks

Now you say "good", and that his AGI is down from the original $ 35,000 to 9,027.
How did you do that? Rather how did that happen?
You're not under impression that so called rental of personal property isn't even taxable are you?

IMWTK.

[taxmandan]

I am afraid of a horrible audit with this one. What would you do with it? Thanks

You are correct to be afraid of an audit, theIRS has shot down that gimmick many times, auto mechanics and contractors 'renting' their tools to their employer or prime contractor. Does he have a written lease agreement? Does it specify what tools the prime contractor is actually renting? I'm even suspicious of the reporting on the 1099 rather than a W-2. You say his 'boss' did this, is he really a contractor or should he be classed as an employee? How many other 1099s did your client receive for work he did as a business owner? Does he have a contractors license and business insurance, bond etc. in his business name?

It will only be a horrible audit if you don't charge enough for your services.

[SueBaby]

Now you say "good", and that his AGI is down from the original $ 35,000 to 9,027.
How did you do that? Rather how did that happen?
You're not under impression that so called rental of personal property isn't even taxable are you?

IMWTK.

Good that I did not want to amend the 1099.
But he had over $24,000 of expenses around this 1099 as a contractor. He said half was the rent of his truck and tools but all went on sch C. That is why he wanted to amend the 1099 so he would not owe so much.

Do I leave it this way and submit it like this? He said he gets money for his truck and tools but separated on his 1099. So what now? I am at a stopping point on this one!