QUESTION
The gas company is asking us to provide a W-9 before they will pay us for damage to our property. Does this mean this will be taxable income?
Asked on Sep 08th, 2016 on Taxation - Georgia
More details to this question:
The gas company has an easement for a pipeline on our property. After we received estimates for the damage and temporary fencing, we submitted a quote for about $40,000. Now the company wants us to fill out a W-9. We asked if that meant we would receive a 1099 and this would be taxable income. The gas company won't answer that question in writing. The agent told us it is standard operating procedure and we won't get a check for the damage if we don't submit a W-9.
1 ANSWER
4 Awards
The gas company's asking for a W-9 does not necessarily mean that any damages they pay you will be taxable income, no. But they will generally be required to issue a 1099 if they are going to deduct the damages against their own taxable income, and the W-9 is needed for them to be able to do that. Whether or not the payment is taxable income to you is a completely separate question that you will need to answer when you file your income taxes for the year you receive the payment. You should consult a competent income tax preparer to determine that answer.
Answered on Sep 09th, 2016 at 6:53 AM
This answer is being provided as general information and not as legal advice. No attorney-client relationship is created by this answer.