Estate Sale Company 1099

[montanaraee]

Hi, we started our estate sale liquidation company in 2024. Do we need to send out 1099’s to our clients for their portion we paid to them? I am getting mixed answers on Google about this situation. Thanks!

[PatriciaV]

Yes, you should send your clients Form 1099-MISC to report Other Income in Box 3. The reported amount should be gross before any fees or commissions you were paid. Provide additional information on deductions from the gross income that the client may use to reduce their taxable income. 

Bottom line: the income from the liquidation sale belongs to the client, not your business. You report fees and commissions on that income on your business tax return.

Additional Information: 

• What is the IRS Form 1099-MISC?
• IRS Instructions for Form 1099-MISC

[montanaraee]

Thank you! Would you be able to tell me which box my clients check on the tax classification portion on their W-9? Individual or trust/estate?

[LeticiaF1]

It would depend on each client and who owns the property you are helping them sell.  

@montanaraee