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Level 2
posted Feb 1, 2022 9:26:09 AM

Do I need to send a 1099 form to a tenant for reducing rent for services?

I have given my tenant a rental discount since he also acts as manager of the property. The "gross rent" and the discount are spelled out in the lease. Another TurboTax expert recommended I show the "gross" rental amount as income and the discount amount as a property management expense. Do I need to send my tenant a 1099 for the discounted amount? This is my only rental property and I am not a real estate professional, according to the IRS definition.

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1 Replies
Expert Alumni
Feb 1, 2022 10:11:17 AM

Yes, you should sent your tenant who is your property manager a 1099-NEC form. 

 

Per NOLO.com: The basic rule is that you must file a 1099-NEC form with the IRS if you pay an unincorporated independent contractor $600 or more during a year for rental-related services. It makes no difference whether the sum was one payment for a single job or the total of many small payments for multiple jobs.

  • This includes payments to property managers, repair people, and anyone else who performs services for your rental and is not your employee.

To create form 1099-NEC, please see the link to TurboTax Quick Employer Forms.