1099-MISC for sale of used computer?

[metayeat]

Last year, I sold my personal computer to a business, because I no longer had any use for it, and a friend who worked there wanted it (for his business use) at a fair price. I just received a 1099-MISC listing the amount of the sale ($1850) in box 7 (non-employee compensation).

I am not in the business of selling computers (used or new), nor did I make any profit on this sale (in fact, the price is below market value for this machine). It was just me, selling my old computer.

Was this company correct in sending a 1099-MISC form to me? Do I have to give my friends at the IRS half of this sale in self-employment and medicare taxes? For the record, I am not self-employed in any fashion.

Any help or advice on how to handle this would be appreciated!

[jainen]

a nice computer

The computer was a capital asset, so put it on Schedule D showing adjusted basis, sale price, and gain if any. If there was no gain, just show zero because a loss is not deductible. When you get the letter from the IRS, tell them where you reported the transaction and there will be no trouble. Believe it or not, sometimes the IRS is easier than dealing with a company's bookkeeper.

If it was worth $1850 used, it must have been a nice computer!

[metayeat]

Thanks for the reply. To further complicate issues, I've already filed my return. Should I file an amended return? Send some other correspondence to the IRS?

You're right about the bookkeeper.. I tried and failed to get a straight answer going that route.

It was a pretty beefy computer formerly used for video editing.. it was nice :-)

[jainen]

wait

>>Should I file an amended return?<<

Just write up your notes and wait. It could be a year or more before the IRS gets around to you. You might ask your friend for a bill of sale.

[metayeat]

Thanks. I do have a copy of the sales receipt that I gave to him. Is that sufficient?