"Tony Cox" wrote:

- quote -

Unless the payment was in the course of the payor's trade or business a
1099-INT is inappropriate. See the 1099-INT instructions.

See the Schedule A instructions for reporting home mortgage interest paid to
an individual.

If this is just A loaning money to B for B's personal use, there's no
reporting by the payor.

--
Phil Marti
Clarksburg, MD

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On Mar 28, 12:25 am, "Phil Marti" <prm20...[at]verizon.net> wrote:
- quote -

Sounds like your friend should have filed a 1099-INT instead.
Penalties for non-filing are detailed in Section O of the General
instructions for form 1099.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"RS" wrote:

- quote -

Why? Did anyone look at the 1099 instructions to see if this was correct?
Hint: it isn't.

- quote -

It's not. Your inventive friend is reporting this an Nonemployee
Compensation in Box 7 of the 1099-MISC. Because of budget cuts IRS fired
all their psychics and have to go with what they're told.

- quote -

No. You need to respond to IRS and tell them about the erroneous 1099-MISC.
You also need to suggest to your firend that he knock it off.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Hi all,

I have lent some money to a friend, who pays me interest on the money.
He sends me a 1099-misc form, and files a copy with the IRS. I declare
that as interest income on line 8a of 1040 and on schedule B. I just got
a notice from IRS that I haven't paid self-employment tax on this
income (social security tax not withheld). I am not sure if this is
correct or not. I am not a self-employed person. I have a regular job
for which I receive W2 form and pay regular employee tax. Is the
interest I receive considered self-employment income? Do I need to pay
social security tax on it?

Thanks,
RS

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >