Does JOE need to send me a 1099 for the $1,200 in fees I deducted from the rent I collected for him?
No.
If not, how do I report my management fee of $1,200 as income on my tax return?
You stated that you own a property management business. It's reported as general business income.
Another way to do it, depending on how you maintain your books and what services you provide to your clients, would be to show the entire amount of rent that you collected, as business income, if you "in fact" actually collect the full rent and deposit that full rent into the business account. Then you expense what you pass to the client, as well as those expenses you pay on behalf of the client, so that you pay taxes only on what you keep. for out of that business income by you, on behalf of the client.
What method you use here depends on what's best for your business structure.
