1099S Tobacco Transition

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  • John3cpa
    Member
    • Oct 2005
    • 78
    #1

    1099S Tobacco Transition

    1099S from US Dept of Ag with gross proceeds 1,974 in box 2 and closing date 7/12/05. No cash received on this in 05. Received a payment of 197.40 in Jan 06. Box 3 "Address or legal description: Tobacco Transition Payment Program". Client says they received no other expalantion.
    It looks like an installment sale with no cost basis and no interest? Client also receives payments from National Tobacco Trust reported on 1099misc, which has always been reported on line 21.

    Am I correct to report as installment sale?
    John
    Tags: None
    • cfsadvsr
      Junior Member
      • Apr 2006
      • 26
      #2
      Tobacco Transition

      It is an installment sale, but there should be a cost basis; based on a price per pound times a certain amount of pounds. I just finished one of these. The client was to receive payments over 10 years.

        Comment

        • rosieea
          Senior Member
          • Jan 2006
          • 270
          #3
          A colleague in Kentucky who does a lot of these uses $2 per pound as the basis.

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