Collecting Scrap metal

[Bill Tubbs]

the activity itself

From Linda's posts I took it as he collects the scrap from where he works and she is contemplating whether he will need to file a schedule C or put it on line 21 "other income".

So IF he is collecting from where he works as an employee and currently files no schedule C would you file a schedule C (or C-EZ ) or put it on line 21 "other Income".

Whether he gets the scraps from only his employer's dumpster, or picks up scraps all around the county -- that isn't an automatic way to determine Other Income (hobby) vs. Sch C. Take a look at the hobby vs. business tests -- http://www.irs.gov/businesses/small/...=99239,00.html Personally, I haven't seen enough particulars from Linda to make a Business vs. Hobby determination.

Actually, if one determines him not to be Sch C, then (if significant) the scraps he gets out of his employer's dumpsters should be classified as a fringe benefit, and be subject to payroll taxes. Not only is the employer paying him in dollars, but also in scrap metal.

Bill

[Kram BergGold]

In summation

Linda,
If he collects the objects while doing his SE business, then I would include the $1300 as part of Schedule C. If he gets it in any other way I would put it on Form 1040 line 21.