This seems to be a common fault with rental management companies and creates an unnecessary hassle for the property owner of a simple rental income entry.
Box 1. Rents
Enter amounts of $600 or more for all types of rents, such as any of the following.
Real estate rentals paid for office space. However, you do not have to report these payments on Form 1099-MISC if you paid them to a real estate agent. But the real estate agent must use Form 1099-MISC to report the rent paid over to the property owner. See Regulations section 1.6041-1(e)(5), Example 5.
https://www.irs.gov/instructions/i1099msc/ar01.html#d0e593
The IRS expect the income as reported on the 1099 to be on the correct Schedule .
A 1099 from a property management company is supposed to show the GROSS collections rather than the net amount. See Treasury Regulation 1.6041-1(f)(1) as well as Example 5 under 1.6041-1(e)(5).
Box 7 is used for payments to independent contractors.
For the Worst-Case Scenario
The management company refuses to re-issue the 1099?
Created a Schedule C and showed the box 7 income as income. Then, under “other expenses” showed a corresponding expense called “1099 issued in error” so that the Schedule C netted out to $0.
Then Properly report the gross rental income on Schedule E.
Management fees are a rental property deduction
