Discussion:Income Guarantee
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Discussion Forum Index --> Advanced Tax Questions --> Income Guarantee
Discussion Forum Index --> Tax Questions --> Income Guarantee
| 23 December 2008 | |
| A physician has an income guantee contract with the hospital. In this contract the hospital advances the physician X dollars. In return, the physician is expected to perform services at the hospital for 3 years following the year of the advance. This is an interest free loan that is forgiven over a period of 36 months.
I believe the physician should recoginize the income for tax purposes when the income is earned prorated over the 36 month period because otherwise it is just an outstanding loan. However, surprisingly the hospital placed all amounts on the 1099 (ouch) as revenue in the year of the advance. If the phyician leaves the service area, all amounts not forgiven will be due back to the hospital. The physican pays taxes on a cash basis. Anyone run into this situation? Do you agree the hospital is making an error by placing it on the 1099? And the amounts should be put on the 1099 as it is earned? | |
| 23 December 2008 | |
| Do a search on"Hospital Loan to Doctor" for similiar issue. | |
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