C-corp return - how to treat rental collections and 1099 question

[Anonymous]

Background - We have a C-corp that we use to property manage only our single family long term rentals. We collect rents via our PM C-corp and distribute the monthly rental payments to our rental LLCs after deducting the monthly property management fees (the rental property LLCs are disregarded, so we report the rental income on our Schedule E / 1040).

Questions - (Q1) When I am filing our C-corp taxes using the TT Business Desktop software, do I report the total gross rents and fees (late fees, move-in admin fees, etc) collected as Business Income [under Sales and service receipts] or just the property management fees as income given I distribute the rents to my LLCs after PM fees? If I report total gross rents collected as Income on my C-corp Tax, do I deduct the amount we send to LLCs after PM fees as Cost of Goods Sold (COGS) or Business Expense (if yes, any suggestions on which category I need to select)? (Q2) Given we own both the C-Corp and the rental LLCs, do we still need to issue 1099's to our rental LLC or myself from our property management C-corp?

[Anonymous_ · Accepted solution]

Re Q!, you can essentially do this either way. If you report the total charged, then you need to subtract all of the items of income the corporation passed through. 

Re Q2, it would be a good practice, if not absolutely required, to issue 1099s as the business of the corporation is rental property management and the corporation is a separate entity.