Discussion:1099 For Child
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Discussion Forum Index --> Tax Questions --> 1099 For Child
DAVETHETAXGUY (talk|edits) said: | 31 March 2008 |
| My client's son (age 35) is disabled because of an industrial accident. The company where he became disabled set up a trust for the son to get money to live on by himself. The trust pays the father, my new client, $9,000 a year on a 1099 Misc to take care of his son. The father spends about $20,000 ($11,000 of his own money) a year for clothes, rent, food, etc.
QUESTION?? If the son is a dependent on the father's return, what can be done with the extra expense ($11,000), set the father as a business with the $11,000 expenses showing as a reduction in AGI? Thanks for any help | |
Scottycoyote (talk|edits) said: | 31 March 2008 |
| unless the father is in the business of giving care to the disabled i dont think you can treat this as a business.
I had a similar case, a sister who is being paid about over 40k a year to be the caregiver to her brother (money is paid by his insurance company). Originally i thought i would have to treat it as schedule c income with expenses but upon further research i found that the money should just be claimed as other income on line 21.......of course in that instance there is no expense deduction either (other than the possible dependency exemption). In my case this worked out to my clients best interest anyway, because at 42k she was owing alot more tax (including se) after expenses than she does just claiming it all on line 21. | |
TheTinCook (talk|edits) said: | 31 March 2008 |
| I wonder if this should be considered the son's income. | |
