I live in one unit of a condo duplex, the other unit was owned by the bank after the guy lost his job and fail to pay mortgage. The Home insurance of our duplex was covered by a single policy which has my name as the contact person. During the time the bank took ownership of the other unit, the bank did not pay its share (half) of the home insurance premium. Fear to lose coverage, I had to pay in full to maintain insurance coverage. Eventually I had to go to the small claim court to get back exactly what they owed me. However, the bank through its attorney sent me the check as 1099misc. Now there is the problem, I just got a letter from IRS stating that I failed to report this "income".

Essentially I paid bill for the bank, the bank paid me back with 1099misc, and now I have to pay tax?


Thank you very much!