Discussion:1099-MISC Requirements by Prop Landlord
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Discussion Forum Index --> Tax Questions --> 1099-MISC Requirements by Prop Landlord
| 25 January 2008 | |
| I am aware a property manager is supposed to issue to a client a 1099-MISC for rents collected on for the owner.
Does the property manager need to issue a 1099-MISC to say the lawn maintenance guy (assuming over $600 of services) or to anyone else providing more than $600 of services for the owner? Or, if not the property manager, then the owner? The instructions for the 1099-MISC state if you are in a "trade or business". My guess would be no 1099-MISC would need to be issued for independent contractor work, as the rental of the home would not be considered a "trade or business". Any thoughts??? | |
| 25 January 2008 | |
| That's an interesting question. Your client is the property mgt. co. The lawn maintenance expense is not a business expense of your client. Nor are many residential landlords in a trade or business.
The property mgt. co is only required to send a 1099 in this situation if it's client is a licensed real estate professional (somewhat unlikely), since they are acting as agent for that professional who is in a trade or business. | |
| 25 January 2008 | |
| That probably won't work though, since non-professionals are allowed deductions for repairs and maintenance (even though not in a trade or business, strictly speaking). I think you have to conclude that this was not contemplated when they developed the rules for 1099's. Toss up?
Strike that. I just read online that you must issue a 1099MISC if you are a landlord and want to take the expense (subject to rule re corp.vs. indiv.-partner I assume). Sorry, I don't have a cite for you as this was not an authoritative source. Bottom line Jda: it seems that ideally the landlord himself should send them, but, the Prop. Mgt. could send them, indicating: XYZ Co. Agent for Joe Landlord as name in Payer's Box. Problem: what about Payer's EIN? I think, again, you could use mgt. co EIN though I could see potential confusion, it would not be on P&L. | |
| 29 January 2008 | |
| My neighbor is a property management company and they are wondering if in fact they are required to 1099 the homeowner's? I have read through the instructions and it is not clear whether or not it's required. Anyone have a solid answer? They have about 500 properties so I have to be careful to give correct and documented advice. | |
Death&Taxes (talk|edits) said: | 29 January 2008 |
| Reg. 1.6041-1(e)(5) seems to cover all questions in this area, with further references as to the amount to be reported. | |
| 29 January 2008 | |
| Went over with code and they stated they are providing the rent income to homeowners however they feel it's imformational only and they do not need to provide the IRS with a copy. Any thoughts? | |
PostingFromWork (talk|edits) said: | 29 January 2008 |
| Informational? I suppose that's why they call them information returns.
I guess the only thing to do is advise the client of the possible consequences for not filing the 1099's and document it for your records. I don't think you'll need to fire the client though. | |
