Tax Year 2016: My wife and I rented out 2 condo's without the use of a property manager the first quarter of 2016. Do we need to create 1099 forms? Or just report the rental income?

9823hf — Wed, 03 May 2023 20:42:57 GMT

You only have to prepare 1099-MISC forms if you paid some...

KarenL2 — Sat, 01 Jun 2019 03:12:25 GMT

You only have to prepare 1099-MISC forms if you paid someone (property manager, handyman, etc.) $600 or more during the year. There is an exception to this rule if the person/business you paid is taxed as a corporation. Otherwise, you can just report your rental income and expenses on Schedule E.

Keep reading for more information on rental property that may help you.

Generally, rental properties are considered passive activities and are subject to the passive activity loss rules. The rules are complex. Simply put, the passive activity rules limit your ability to offset other types of income with net passive losses (rental losses and other types of passive losses).

That said, if you actively participate in a rental real estate activity, you can deduct up to $25,000 of your rental loss even though it’s passive. To actively participate means that you own at least 10% of the property, and you make major management decisions, such as approving new tenants, setting rental terms, approving improvements and so forth.

There is a phaseout on claiming this loss. If you have modified Adjusted Gross Income over $100,000, the $25,000 rental real estate exception decreases by $0.50 for every dollar over $100,000. The exception is completely phased out when your modified adjusted gross income reaches $150,000.

This article on Real Estate Tax and Rental Properties has more details on rental properties.

topic Tax Year 2016: My wife and I rented out 2 condo's without the use of a property manager the first quarter of 2016. Do we need to create 1099 forms? Or just report the rental income? in Investors & landlords

Tax Year 2016: My wife and I rented out 2 condo's without the use of a property manager the first quarter of 2016. Do we need to create 1099 forms? Or just report the rental income?

You only have to prepare 1099-MISC forms if you paid some...