Why Did I Receive a Form W-9 to Fill Out

[dfitter]

My question involves a consumer law issue in the State of: Ohio I reached a mediation settlement over a boat with the manufacturer. It was agreed they would buy it back for $XXXXX.00. They have been prolonging the exchange, and 3 months past reaching an agreement they now want me to fill out a W-9 form. I look at this as simply the selling of a boat, no more. Any thoughts?

[Mr. Knowitall]

The purpose of the W-9 is to allow whatever entity is paying out the settlement to properly report that payout to the IRS.

Beyond that, I have no access to the settlement agreement, and thus cannot comment on its terms. Discuss the issue with your lawyer.

[flyingron]

The W-9 in itself isn't a big thing. The question is if they issue you a 1099 (9 times out of ten this is why they ask), would it be in any way taxable to you.

[dfitter]

I guess that is my issue. I see no way it is taxable. Like I said, I am selling them the boat.

[flyingron]

Sales can indeed be taxable, but it's likely they aren't offering you more than your basis so it isn't likely in this case.

[Wilson2012]

Makes no sense. Did you have the manufacturer fill out a tax form when you originally bought it from them? Do we all need to start providing our social security number and fill out a tax form now whenever we buy or return stuff? Has it gotten that bad? But I'm not an attorney or tax person, just someone reading stuff that doesn't personally make any sense.

[flyingron]

This isn't a retail transaction. He's receiving a settlement in lieu of his lawsuit. A 1099 is required for lawsuit settlements. It doesn't mean he has any taxable income.