The husband worked for Teledyne but he passed in 2020. In 2021 his wife got awarded his company stock share on a 1099-NEC for $180000.
Should the $180000 be reported on Sch C (and pay self-employment taxes) or as Other Income?
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The husband worked for Teledyne but he passed in 2020. In 2021 his wife got awarded his company stock share on a 1099-NEC for $180000.
Should the $180000 be reported on Sch C (and pay self-employment taxes) or as Other Income?
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"wife got awarded his company stock"
That's an interesting phrase. Who actually owned the stock on date of death - the company, or the husband? If the husband owned the stock already at DOD, it seems the company would have had no involvement. It sounds like you are saying this is actually delayed compensation. Who does the recipient TIN on the 1099-NEC belong to?"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
"That's enough! When you didn't know what you were talking about, you really had something! [to Curly]" -Moe Howard -
I would see if you can convince the company to correct the 1099-NEC to $0 and issue a 1099-MISC for other income. Since it's in the year AFTER death it should not be subject to SS/MC taxes but is IRD to the spouse. If they don't correct it, I would attach a statement to the return indicating that this was IRD of [Deceased name] and not Trade or Business income.
RickComment
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I would tend to agree with both answers.Comment
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Thank you for the posts. Here is some follow-up information: The recipient's TIN is on the 1099-NEC. The spouse also provided a copy of a 2021 1099-B showing the trades with the husband's name.Comment
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