I am working on filling out a 1099-MISC for the landlord of my business office. I have a monthly rent fee that includes a flat-rate utilities fee. I have been instructed to put this amount for the year in Box 1 "Rents."
However, in addition to the monthly rent/utilities fee, the first check I paid to the landlord included money for improvements (e.g., extending an internal office wall, new window shades) that I requested prior to agreeing to rent the office. The landlord covered a portion of the improvements to be done, and I paid the landlord for a portion of the expected cost.
Do I include the amount paid for improvements in Box 1, or do I put it in Box 3, "Other income?
Or, do I not put this amount on the 1099-MISC at all? If I do not put it on the 1099-MISC, do I have to report it on a 1099-NEC? The amount of money paid for improvements was under $600, but the total money paid to the landlord during the year was over $600.
I want to make sure I understand. You are the tenant, and you are in business, and you rent an office?
And because you are in business, and you paid more than $600 to a person (who is not an S-corp or multi-member LLC) you need to issue the landlord a 1099 of some kind?
In that case, everything you paid is rent. How the landlord divides it between rent, repairs and improvements is the landlord's problem. You certainly don't issue a 1099-NEC, because this person is not your worker or subcontractor--they did not do work for your business.
Correct, I am the tenant. I am the managing member of an LLC. I rent the office for my business use.
The landlord who is the owner of the building has an LLC, but it is not taxed as an S-corp. I paid the LLC more than $600 dollars.