@Carl wrote:
On the other side of that coin, if you can't spend a single penny of the rental income without the implicit permission of the property owner for each and every disbursement you make, then you are correct to report the gross rental income to the property owner, as well as provide them a detailed list (with receipts if applicable) of all expenses you paid on their behalf and with their permission, so the property owner can claim it on their own tax return. In this scenario, either the property owner or the property manager would issue any 1099-NECs where required.
Typically, the property manager issues all 1099-NECs, as that is but one of the services the property owner is paying the property manager for.
This is the exact scenario. We receive rent on behalf of an owner, pay expenses, and disburse the net to the owner. We do not consider the rental income as (our) income, nor do we deduct the expenses these properties incurred.
Since the commercial tenants are sending me a 1099-MISC for the rent they paid, the question is how do I declare the RENTAL income on my 1065 (Partnership Return)?
Say I collect $100,000 in rent for the owner. I receive a 1099-MISC from the commercial renter in this amount showing he paid me rent. My management fee is $2000.
1. Do I declare $100,000 in income on my 1065 under Income 1a (Gross receipts or sales) plus an additional $2000 for my fees?
2. Second, since I also send a 1099-MISC to the owner for the gross $100,000 in rents, where do I deduct this amount? Do then take the $100,000 deduction on 1065 under Deductions (#13 Rent)?
Or do I completely leave the $100,000 in rent collected out of my income on the 1065, and just declare my $2000 fee as income? I'd like to do it this way, as it seems simpler; however, remember, I am receiving a 1099-MISC from the renters showing they paid me $100,000. If I receive a 1099-MISC showing rent income of $100,000 and issue a 1099-MISC showing rent paid (to the owner) of the same exact amount, do I even need to declare the said income?
