I have a vacation rental home that I manage on my own.
So that is not residential rental real estate that gets reported on SCH E. You hvae a vacation rental. Since you "DO" provide services on a recurring basis to your tenants, it's a SCH C business. (If you paid one person $10K in a year to clean, then you provided recurring services. Period.)
Since your cleaning person was not a W-2 employee and you paid them more than $600 in the tax year from your SCH C business (not SCH E) you are required by law to issue them a 1099-MISC. Weather you issue it or not does not negate the fact that you can claim the expense. But if you claim it and don't issue the 1099-MISC, you can expect to be audited and fined about 24-36 months after filing your tax return reporting the expense.
You can claim the expense on the tax return for the tax year you *ACUTALLY PAID* the expense. But again, there's no question that this is *NOT* a SCH E rental. It *IS* a SCH C active business.
