Form 1099-MISC

Box 1 Rents:
  • In-scope only for a land lease or a gas/oil lease.
  • These entries flow to Schedule E.
  • No expenses can be claimed except property taxes.

  • One exception: A personal home rented for less than 15 days is in scope.
    • If no 1099-MISC was issued for the rental, do not report the income.
    • If a 1099-MISC was issued, report the income as 'Rents' on the 1099-MISC, then enter the same amount on Schedule E, Line 19 as "less than 15 days exclusion."


Box 2 Royalties:

  • If royalty payments are for oil/gas production, having them in 1099-MISC Box 2 is correct (which flows to Schedule E).
  • If royalty payments are a result of self-employment (writer, singer, song writer, patent holder, etc.), they should be in 1099-MISC Box 7, Nonemployee compensation (which flows to Schedule C).

Box 3 Other Income -vs- Box 7 Nonemployee compensation:

  • Box 3 is for income from an activity in which there is no continuing relationship with anyone or any company, and there is no expectation of ever doing it again.
          (Example: An honorarium for giving a speech.)
  • Box 7 is for income from self-employment, or an activity in which there is a continuing relationship with a person or a company, and there is an expectation of doing that activity again.
          (Example: Giving piano lessons.)

    Update Feb 26, 2018: (email from Mirta)

    We have come across several 1099-MISC with an entry of approximately $17 in box 7. This is from the distribution of some kind of legal fund. (Typically, they are from one of the 'BigThree' car companies: GM, Ford, or Fiat/Chrysler.)

    Move the $17 to box 3. We do not need to generate a schedule C for this income.

Updated Dec 20, 2019