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Posted by Harlan Lunsford on February 11, 2008, 6:22 pm
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George Anthony wrote:
> A person purchased a motorcycle along with a insurance policy that, in case
> of sickness, the policy would pay the loan payments on the bike. The
> person became ill and could not work so the company made the payments. The
> company then sent a 1099-Misc with the payments it made in Box 3. I thought
> that if the person paid the premiums the proceeds were not taxable?? If
> this is the case, how is this reported?
>
I'm with you, George. Just like disability insurance premiums paid for
with after tax money.
Anyway, there's a 1099 and must be dealt with. 1. do nothing, report
nothing anywhere; wait for CP2000 letter maybe; maybe not!) 2. file
paper tax return with statement and copy of the 1099 explaining why it's
not on line 21. (line 20???? darn; I forget)
Cant think of an option 3 right now. AGree?
ChEAr$,
Harlan Lunsford, EA n LA
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