I have a taxpayer who has never been a property owner who was offered and accepted relocation assistance from a new property manager in TY2018. He received $5,000 from the property manager and just received a TY2018 Form 1099 for the same amount. They have listed the income in Box 7 - nonemployee compensation. The property was itself was not under any foreclosure or short-sale. It was simply sold by one landlord to another and to motivate folks to leave so that renovations could be done they offered tenants these incentives without disclosing that it would be income. I cannot find any citations to offset this and am planning on including as misc income unless there are other thoughts or citations. Thanks in advance.
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Taxable -- Yes
I would put it on line 21 other income
Chris -
Yes, taxable. Whether or not it could have been treated as moving expense in the past, adhering to new job and distance rules, etc., it is a moot point now since they have been disallowed for 2018.Comment
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I forget the year but back in the day we had a 100 apartment building that was converted to Condos. All the tenants got a $1000 check as settlement of their rights against the developer. I remember that because the check had a stamp at the back where you endorse before cashing. My friend was a tenant and I believe I researched it and since it was liquidated damages, not taxable.Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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Thanks. I'm planning on including it on Line 21. It's just too bad that they didn't disclose it to them. We could have adjusted his W4 since we had time in 2018. Onward!Comment
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All the research I can find indicates liquidating damages are taxable. Only settlements for personal injury would not be.Originally posted by ATSMAN View PostComment
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