Frank S. Duke, Jr. wrote:

- quote -

Sounds to me that it should have been reported in block 3,
Other income. Certainly I agree with you that it is NOT
subject to SE tax, even though it might have been reported
in block 7.

Cheer$,
Harlan Lunsford, EA n LA

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Procter & Gamble has offered separation packages to
thousands of employees in the past few years. Part of the
package was a "retraining" benefit to prepare ex-employees
for another job. The benefit was actually paid by an
outsourcing management company upon presentation of proof
that the training was completed and that it had something to
do with another career. This, by the way was so loosely
interpreted that lots of these unlucky outcasts in their
late 50s with 15,000 to 50,000 shares of P&G stock at $100 a
share were getting boat captain and dive masters
certifications or training to be travel agents.

At the end of the year, people received a 1099MISC showing
the reimbursement as "Non-employee compensation".

I know that if this is reported on a schedule C as SE
income, it would NEVER be questioned by the IRS but is that
really correct. Is this SE compensation? Does the
individual owe SE tax on this income? Or, is it like Jury
duty or like a prize and reportable on line 21 without form
SE and C-EZ.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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