A.G. Kalman <glendale202-mtm[at]yahoo.com> wrote:

- quote -

Well, that's hard for me to say because I would have
approached the problem differently from the inception. It
seems to me that what happened was a "mistake" made by the
original payer. I'm not sure that your relative should have
tried to FIX this mistake, because it wasn't of his making
in the first place. If he didn't want to return any of the
money, he could have simply kept it until the other parties
demanded that he do something, thereby forcing the payer and
the NRA to get THEIR ducks in a row.

In other words, I would "let the record reflect" that the
error was on the part of the payer. I'm not sure it was
appropriate or advisable for your relative to become a
"withholding agent" and file 1042's, thereby stepping into
shoes that he never intended or agreed to wear.

Sorry if I appear to be hard nosed, but that's how I see it.
<g
MTW

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

MTW wrote:
- quote -

The payer is an entity of the race track where a horse
finishes in the money. Forget for a moment that my relative
rues the day he got involved with an NRA. No way, he is
returning any funds and there is no way he is going to get a
revised 1099-MISC for 2003. Given all that, do you think he
has handled it as best as he could? (I just advise him, he's
smart enough to prepare his own return.)

--
Alan
http://taxtopics.net

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

A.G. Kalman <glendale202-mtm[at]yahoo.com> wrote:

- quote -

Hmmm (again)... Who is the actual payer? And/or who asked
your relative to get involved in this venture? It sounds
like that party is definitely trying to cut corners and pass
the compliance/reporting problems on to you.

Under the circumstances, I would probably return the portion
of the money that didn't belong to me and "demand" a revised
1099. If this deal is not, in fact, a partnership, then I
wouldn't want to assume any fiduciary responsibility with
respect to the other investor(s).

MTW

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Michael T Wing CPA wrote:
- quote -

This appears to be how joint ownership in a horse is handled
by other owners at Santa Anita. Others have also received
1099-MISC forms for the winnings and they report the income
and expense on a Schedule C. My relative wasn't aware that
the other 80% owner of his horse was an NRA when he was
asked if he wanted to be a 20% joint owner. Basically, they
get a bill for the horse's expenses and they get a share of
any winnings.

--
Alan
http://taxtopics.net

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

A.G. Kalman <glendale202-mtm[at]yahoo.com> wrote:

- quote -

Hmmm... Why isn't a partnership return being filed ???

MTW

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

A close relative received a 1099-MISC for business income of
which he was only supposed to receive 20%. He also received
the payment (100%) in the last week of December. The 80%
owner is a foreign person residing in Canada who will not be
submitting any type of W-8. This appears to be the reason
why everything went to my relative. I've never dealt with
this situation in the past.

I told my relative to compute 80% of the total, withhold
30%, and send the balance with a 1042-S to the foreign
person and inform him that he will need to file a US 1040NR
if he wants his withholding back. My relative does not have
an EIN. Also told relative to submit the withholding to the
IRS with a 1042 and not to bother with depositing the funds
with an 8109. Also told the relative to send the IRS copy
of the 1042-S and its cover form to the IRS.

Hopefully I haven't screwed this up yet.

Now for the Schedule C.

I told relative to claim 20% of the 1099-MISC as gross
income, deduct O & N expenses and attach a statement with a
copy of the 1042-S explaining why only 20% of the 1099-MISC
belonged to my relative.

The income derives from a 20% ownership of a race horse. The
income is the share of purses won by the horse.

--
Alan
http://taxtopics.net

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->