Web Site Advertising Revenue - Box 7 of 1099-MISC

[TheTaxMan]

I have a number of new clients that have web sites that have advertisement links on them that generate revenue for these clients based on the number of hits on the ads.

Anyway, all of the payers of the website ads. issue my clients a 1099-MISC with the amount of revenue in Box 7 - Nonemployee compensation.

The 1099 classification appears to be correct and as such the clients should report the income on a Schedule C and not as other income on line 21 of the 1040.

However, when reviewing by clients' previous year's tax returns their previous tax preparers listed the income as other income and NOT on a Schedule C.

Shouldn't this web site ad. revenue be reporting on Schedule C?

Thanks.

[Chief]

Schedule C

I would report this on Sch C. too.

[sea-tax]

I would report it on a Sch C also. Maybe the prior preparer put it on line 21 but made it subject to Se Tax. I know that my program Lacerte will allow you to put income on line 21 and then force the sch se to impute se tax.

[S T]

Why

Why would this be reported on a Sched C, this is not the T/P normal business?

The T/P is receiving income from advertising his own business on a website, that contain other advertising links? Maybe like renting or leasing space on his website?

would these amounts be subject to SE tax?

Isn't it more like interest earnings or royalties?

Sandy

[Girard Van De Lay]

income

I would thimk that this should be just misc income. They are not in the business of advertising this is just an extra stream of money produced off the website. If it was me I would put it down as line 21 income.

Girard Van de Lay
importer/exporter

[jainen]

list it as "Other income"

>>They are not in the business of advertising <<

Oh, but they are. That's exactly what they are doing--selling ad space in a business environment with a profit motive, normal business accounting--all the hallmarks of a regular and ongoing business activity. It isn't their main business activity so you do list it as "Other income." That would be Schedule C, Line 6.