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posted Jan 10, 2020 11:42:49 AM

Rented out our home in 2019 and used a service to locate a renter. Does this qualify as needing a 1099?

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4 Replies
Level 15
Jan 10, 2020 12:07:08 PM

As a general rule, you must issue a Form 1099-MISC to each person to whom you have paid at least $600 in services for your business. 

Not applicable
Jan 10, 2020 12:58:22 PM

here's from IRS 1099 instructions

Exceptions. Some payments do not have to be reported on Form 1099-MISC, although they may be taxable to the recipient. Payments for which a Form 1099-MISC is not
required include all of the following.

• Payments of rent to real estate agents or property
managers. However, the real estate agent or property
manager must use Form 1099-MISC to report the rent paid
over to the property owner. See Regulations sections
1.6041-3(d), 1.6041-1(e)(5), Example 5, and the instructions
for box 1.

 

so I would say no 1099 required. 

Expert Alumni
Jan 10, 2020 3:05:17 PM

It largely depends on the payee. If the service you used to find tenants was not a corporation (i.e., Bob's Tenant Finders, Inc.), it is recommended that you report the payment on a 1099-MISC. Generally, payments to a corporation (including a limited liability company [LLC] that is treated as a C or S corporation) do not need to be reported on a 1099-MISC.

 

However, according to the IRS’s guidance here, if, as part of your trade or business, you made the following type of payment, it is recommended that you report the payment on a 1099-MISC:

  • Services performed by independent contractors or others (not employees of your business) (Box 7)

Even though you are acting as a landlord, it is important to file a 1099-MISC if you are looking to take the (up to) 20% Qualified Business Income (QBI) deduction. This deduction is available to individuals and owners who seek to claim the deduction with respect to a rental real estate enterprise. A rental real estate enterprise will be treated as a trade or business for purposes of the QBI deduction if certain criteria are met. Here is some more information from the IRS on the QBI deduction.

 

Level 15
Jan 10, 2020 4:42:26 PM

As a rental property owner, *YOU* are not required to issue a 1099-MISC for anything. However, since you paid a management company to manage the property for you, the management company may (or may not) be required to issue *YOU* a 1099-MISC showing the rent that was paid to you.

The only way you would be required to issue a 1099-MISC is if you paid an *INDIVIDUAL* more than $600 for something in 2019. If you paid a business, then no 1099-MISC is required.