TomD8
Level 15

Investors & landlords

@tianwaifeixian --

 

"If the contractor has his own business, does that mean I don't need to worry about it?"

 

If the contractor is a corporation, you don't have to issue a 1099-NEC.

 

Here's an informative article on whether or not rental real estate activity qualifies as a "trade or business":

https://www.nolo.com/legal-encyclopedia/is-your-rental-activity-business-investment.html

 

If your contractor is not a corporation, I'd just go ahead and issue the 1099-NEC.  There's no penalty for doing so, and it'll serve to document the expense.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.