1099-patr

[taxmandan]

New client has a 1099-PATR, with $209.67 in box 5, zeros in everything else, no dividends. This is from a local farm store, she is not a farmer or in any business, does this go on the 1040 somewhere? Can't find anything about that box and there are no instructions with the 1099-PATR, not even Pub. 17 mentions this form except for dividends.

[Koss]

Box 5

Is she operating a farm store as a sole prop on Schedule C?

The amount appears to be ordinary income. According the instructions on the back of Form 1099-PATR, Box 5

Shows amounts you received when you redeemed nonqualified written notices of allocation and nonqualified per-unit retain allocations. Because these were not taxable when issued to you, you must report the redemption as ordinary income to the extent of the stated dollar value.

I have no idea what all that means. But I probably wouldn't spend a lot of time on this over $200. I would report in as income on her Schedule C, assuming that she has a Schedule C. If she doesn't have a Schedule C, then I have misunderstood something...

BMK

[Burke]

If no business, report on Line 21, Other Income.

[Koss]

Ordinary Income

I misread the original post. The original post said "this is from a local farm store," and I thought he was referring to his client. But he went on to say that she is not operating a business, and that she does not have a farm.

I agree with Burke that it can be reported on line 21 as other income.

BMK

[Lion]

If she previously deducted as expenses her purchases from the farm store (feed for her race horse or her chickens or...) then the 1099-PATR is income on that form. If she did NOT deduct her previous expenses (feed for her pet dog or pansies for her front walkway) then she does NOT have taxable income. UConn's book store (we all know who UConn is now, right?!) is a coop and sent my daughter Forms 1099-PATR each year. She was not deducting her books so had no income. If I'd bought office supplies there while visiting her and received a 1099-PATR I'd have other income on my schedule C now.

[taxmandan]

Thanks for the replies, she doesn't have a farm or business, and she said it was something from her dad's estate. (?) Just don't know if this is reportable income to her, she hasn't received anything from the farm store nor does she expect to. The form didn't have any of the instructions that accompany most 1099 forms explaining each box.

[Lion]

Oh, if dad's estate was running a trade or business, including a farm, then this may be a rebate of a previously deductible expense to the estate. Maybe taxable after all to a beneficiary of the estate. She needs to talk to the executor of the estate.