!099 to Indepent Contractors Paid by Property Manager Out of Trust Accounts

[annetteirene]

As a property manager do I need to issue a 1009 to vendors I pay out of an owner trust account? I "host" short term rental properties on VRBO and Airbnb for other property owners. I sometimes pay vendors - lawn service, pressure washers, pool and spa services - for work they do at properties on behalf of the owners of the property out of funds kept in a trust account. Do I issue 1099 NECs to these vendors if they were paid more than $600? Or is it the responsibility of the property owner, since they are claiming these expenses on their taxes based on reports I provide to them?

[Cynthiad66]

Yes, you as property manager must issue Form 1099.  You also provide copies of the issued documents to your owners, for their records.

According to the IRS, everyone who is regularly “engaged in the business of leasing or renting real estate for income or profit” must comply with the 1099 requirement. So, this means that property managers should issue 1099s to each independent contractor, vendor, or professional service whom they hired and paid more than $600 within the year. 

Responsibilities of Property Management

IRS Guidance for Issuing Form 1099

[annetteirene]

Thanks so much for the reply! So, this brings the question - if I am supposed to supply the owners of those properties with copies of the 1099s issued to the vendors how does it work if the vendor did work at multiple properties owned by different individuals? Especially if the amounts per property fall under the $600 threshold. Do  I only issue 1099s  when the vendor has $600 or more billed to a given property? Do I issue the vendor multiple 1099s - one for each property? I keep receipts and supply each owner with a year end accounting of expenses. 

[AmyC]

1. You can't send  one 1099 to multiple owners, just send to the vendor and IRS. You can send the owners a list of expenses with amounts. 

2. No, the total you pay to the vendor goes on one 1099 form regardless of the number of properties it covers.

3. Issue one 1099 per vendor

Your accounting method is great. The owner has an official record by you of the expenses.