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1) Got a 1099 Misc. from my lawyer resulting from a personal injury award. It's not taxable but the way in which the 1040 form is constructed it looks to the IRS as if it is ordinary income and thus taxable. Is there another form I could use to let the IRS know that this is non taxable income?

Let me make sure I've got this straight. Your attorney issued you a 1099-MISC for a personal injury award? Where did you shop, Lawyers R Us? Just out of curiosity, what box is the number in?

I'd send the lawyer a stern letter demanding that the 1099 be rescinded, with a copy to the bar association and, if there is one, a copy to whatever state agency oversees lawyers.

If the award is nontaxable (Pub 525) there are two schools of thought about an erroneous 1099. I attend the one that says ignore it and explain to the IRS when they inquire. I advise this method because once you object to a 1099 during an audit the burden shifts to the IRS to prove that the 1099 is correct.

2) In the capital gains/loss section of the return do I have to list every trade I made for the year and show profit/loss for each one. Or can I just take the data from brokerage firm that indicates a net profit/loss for the year?

See the instructions for Schedule D. All sales must be documented individually, but if you can come up with an appropriate attachment you can just put totals on the Schedule D.

Phil
Rule Your Retirement Home Fool
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