Annuity Chargeback and TTaxes

[mahdlokg]

I wrote a large annuity which resulted in a 40k commission in Feb 2015. The client died in late November. My 1099 from the company it was written with, I already have made a payment arrangement with the company. (2k per month until the debit balance is cleared.) The taxes are my main concern. I filed an extension, so 2015 has not been filed yet. Is there a way to deduct the loss for 2015? or 2016? I'm paying the company I've seen a few posts relating to this topic, but they seem to be mostly about advances. Any help would be appreciated.

Somebody asked me on a previous thread what my 1099 looked like from this company. The 2015 1099 was for 72k total. 40k of that is now debit balance, minus 8000.00 in payments that have all been made in 2016.

 

[scagnt83]

I wrote a large annuity which resulted in a 40k commission in Feb 2015. The client died in late November. My 1099 from the company it was written with, I already have made a payment arrangement with the company. (2k per month until the debit balance is cleared.) The taxes are my main concern. I filed an extension, so 2015 has not been filed yet. Is there a way to deduct the loss for 2015? or 2016? I'm paying the company I've seen a few posts relating to this topic, but they seem to be mostly about advances. Any help would be appreciated.

Somebody asked me on a previous thread what my 1099 looked like from this company. The 2015 1099 was for 72k total. 40k of that is now debit balance, minus 8000.00 in payments that have all been made in 2016.

As it was mentioned before. You can only deduct what you have paid back. The remaining balance is a liability, not an expense or a loss.

Claim what is on your 1099s. Deduct only the part of the chargeback that you have paid back during that tax year.

 

[mahdlokg]

That makes perfect sense to me, but where on the taxes would the payments I'm making this year come off of next year's (2016 return)? Thanks.

 

[scagnt83]

That makes perfect sense to me, but where on the taxes would the payments I'm making this year come off of next year's (2016 return)? Thanks.

If you are a Sole Proprietor it would be shown on your Schedule-C if I remember correctly.

 

[MW Agent]

That makes perfect sense to me, but where on the taxes would the payments I'm making this year come off of next year's (2016 return)? Thanks.

If a schedule C, I would list it as an other expense line item: commission charge back. As you probably know, an extension doesn't buy you any extra time to pay. Balances due are subject to interest and penalties.