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I've looked into this in depth and believe you do not need to send your property manager a 1099.
Note the 1099 your property manager sent you should have shown $10k in rental income (total collected not the amount disbursed).
Your Schedule E should account for the $1k in management fees.
See [external link removed] for an indepth post with references to the appicable IRS code.
Good answer. But what about a prop management company that sends a 1099-Misc showing a combined amount of income from 3 rentals. TTax won't let me divide up the amounts. It lists the entire amount as income from 1 house. How do I apportion it? Help!
@fernjunk Thanks for your clarification. I would love to see the article you posted about not requiring the property owner to issue a 1099-MISC to the property manager, but unfortunately the external link was removed.
Can you try to provide the link again or a hint at where to find the article you were trying to post?
@TurboJake, perhaps this discussion will help. Back in 2011, the Small Business Job Act included a requirement which would have treated all rental properties as a business and required owners to issue 1099's to contractors, including property managers. But the law was repealed, so this is not a requirement for any owner who is not in the business of renting properties. Here is a link to the Journal of Accountancy article that came out at the time.
[Edit 12/23/2019]
The bottom line answer is NO. Period. End of story.
However, the property manager that you pay "may" be required to send "you" a 1099-MISC reporting all rental income received in box 1. If box 1 shows the gross rent, then you can claim expenses on your SCH E including what you pay the property manager. But if box 1 is only the amount that you are paid after expenses, then it's perfectly possible that you will have NO rental expenses to claim other than mortgage interest, property taxes and insurance.
@CalCountry - When you say "corporation", does that include LLC's too?
I used a property management company in 2019, and they sent me a 1099-MISC form. However, it includes 100% of the RENT they COLLECTED, not merely what they paid me. They included on the 1099-MISC the commissions they kept, which seems improper to me. I never collected a dime directly from their tenant. They retained their commission and paid me only the difference (i.e. 92% of the total rent they collected each month). How do I deal with this situation? I read that I am not supposed to 1099 them, but I am NOT paying taxes on their income!
You put in all the income and then expense off their commissions and fees that they kept. You will not pay tax on the income since it is subtracted. @spammernaut
LLCs are only exempt from receiving 1099-Misc forms if their tax classification is "C" or "S". If they are LLPs or single-entity LLCs, they are NOT exempt and should receive one. Box 3 on the W-9 should clarify the vendor's classification. The rules are clarified in your link to the IRS website.
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