I have two 1099-MISC that overlap in rents

[bajb]

Housing Authority sent a 1099-MISC and the rental management sent a 1099-MISC some of the rent has been reported twice. Housing Authority gives the rent per owner and not to whom it was deposited to (in this case the property management). How to report so I do not overstate the rental income?
Thanks
Berend

[MichaelL1 · Accepted solution]

The issue is that these get matched with IRS.  First try to get them to correct the 1099Misc, which probably will not happen.

Then you could report correct amount actually received, but may get a letter from IRS a year or two later and then will have to explain it to them.

Last option is to report the two 1099Misc exactly as you got them and then report a Misc. Expense, for duplicated amount on the 1099Misc that was double reported.  This way the 1099Misc matches the return. 

[boomtown]

Thanks, I have same issue. I'm going with 3rd option: report the Housing Authority 1099-MISC as income and an expense. I put it on the final screen for "Miscellaneous Expenses" and in the description I wrote that the money from the Housing Authority was deposited with the property manager.

Both my property manager and the Housing Authority were useless, saying that the situation was not a problem for other customers, so it must not really be a problem for me, and so since there wasn't a real problem they didn't need to take any actions...

I pushed and got some more reasonable explanations, though they might not be true and might just be whatever each organization could come up with off the tops of their heads when pressed:

• The Housing Authority doesn't want to change it because it's tied to the receiver's social security number in their systems.
• The Property Manager doesn't want to change it because they did send that money to us and don't want their records to disagree with the 1099 MISCs that they issue.

[Critter-3]

@boomtown

Solution going forward ... have that money come to you directly ... do not have the management company recieve the funds on your behalf so they have no reason to add it to the 1099 they issue to you.  Funnel funds to them to cover expenses if needed since funds recieved from owners to the mgmt co is not considered income and it not reported on a 1099.

OR >>> just use option 3 and leave things as is ... both will work just depends on how much effort you want to put in. 

[boomtown]

Thanks I realized that next year I have to go with your solution. This "expense" is eating up my expense allowance! It's not a problem every year but I had to forgo section 179 deductions this year because I was put over the limit by this issue. It'll hit me in 2022 as well! At least the depreciation is just pushed out, not lost entirely.

[Mike9241]

the 179 is limited by business net income. so either you have a loss or your net income is less than the 179 deduction for the year. the money you give to the mgmt agency to pay for expenses is not a tax-deductible expense. it's what they pay out for expenses that you can deduct.