Rental expenses

4 replies
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If I hire a company to install or replace something at my rental property, do I have to issue a 1099-misc or does that only apply if I hire an individual to do the work?

Hal_Al

Level 15

Only individuals and even then it's a little fuzzy.

It became a little fuzzy under the new 2018 tax law. Landlords are, generally, still not require to issue 1099-Misc forms to service providers.

Reference: http://www.forbes.com/sites/irswatch/2013/03/06/should-landlords-be-filing-1099s-for-service-providers/

But, a landlord 1099-misc may be required to qualify for the QBI deduction. Reference: https://www.nolo.com/legal-encyclopedia/do-landlords-need-to-file-form-1099-misc.html

Most rental properties do NOT qualify for the QBI deduction.

Anonymous_

Level 15

@Hal_Al wrote:
Most rental properties do NOT qualify for the QBI deduction.

That is correct and there is a Section 199A safe harbor for rental real estate.

See https://www.irs.gov/pub/irs-drop/rp-19-38.pdf

AmeliesUncle

Level 15

If the rental rises to the level of a "Trade or Business" and you pay someone $600 or more during the year for services, you are required to issue a 1099 to a non-corporate business. If they are a corporation, a 1099 is NOT required. But you would want the business to fill out a W-9 so you KNOW that they are a corporation or not.

If the rental does NOT rise to the level of a "Trade or Business", no, a 1099 is NOT required.

Unfortunately, whether or not a rental rises to the level of a "Trade or Business" is tricky and often unclear. You would need to do some research on that matter.

Critter-3

Level 15

Bottom line ... even if they are not required it would not hurt to issue them to CYA. Corporations are still exempt so have them fill in a W-9 so you know their status.