1099-MISC Miscellaneous Income

Miscellaneous Income represents those amounts not reportable on any of the other 1099 forms.  In addition to royalty trust and payments in lieu, amounts may include reimbursements.

 

 

Royalties

Box 2 reports income credited to your account from royalty trusts.  Payments of royalties are generally from investments in natural resource companies.Supplemental tax information is furnished for this income on the WHFIT Tax Information Statement by March 15.

Other income

Box 3 reports income credits classified as "other income" for tax purposes.  This includes stock loan fees earned.

Non-Employee Compensation

Box 7 reports reports asset management fees earned.

Substitute Payments in Lieu of Dividends or Interest (PIL)

Box 8 reports PIL payments credited to your account during the previous calendar year.  The amounts were credited in lieu of  the normal interest or dividend payment when your security is lent.  As disclosed within your margin disclosure, your broker is authorized to loan your shares from an account with an outstanding margin debit balance. (Note: PIL payments are not eligible to be treated as qualified dividends, except under specific circumstances.)

Important Points on PIL Income:

  • The PIL income (credited to your IB account) cannot be “netted” with PIL paid (debited from your IB account) on stocks you have borrowed.
  • PIL is not eligible to be treated as qualified dividends, except under specific circumstances
  • PIL income is not an interest or dividend payment, but miscellaneous income and should be treated as such on your tax return.

 

 

Note:

IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

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