It depends. The payment for your rental property, considered as business with respect to expenses, would be an allowable deduction. If the rental portion of the expense is at least $600, then you would be required to issue a Form 1099-NEC to the lawyer. See information below:
Reporting Payments to Independent Contractors
File Form 1099-NEC for each person in the course of your business to whom you have paid the following during the year at least $600 in:
- Services performed by someone who is not your employee; (including parts and materials) (box 1); or
- Payments to an attorney (box 1).
If the following four conditions are met, you must generally report a payment as NEC.
- You made the payment to someone who is not your employee.
- You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
- You made the payment to an individual, estate, or, in some cases, a corporation.
- You made payments to the payee of at least $600 during the year.
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