Rental Property Management

[LHC-kerry]

I am always confused about my payment to my Property Management Company. I always note I have paid them over $600.00, which seems to indicate I am required to file a Form 1099-NEC. I do not believe the form IS required so I check the block "No I Did Not" where asked. My question is, what is it IRS wants and am I OK with what I am doing?

[PattiF]

Yes, you are okay with checking that you are not required to file Form 1099-NEC. You have an agreement with the Property Management Contractor to provide annual services for your rental property. 

They will report their income on their business tax return after deducting the expenses of their fees and payments to contractors who made repairs. The property management company sends the 1099-NECs to the non-employees.

You will report the management fees as a business expense along with a detailed listing of other expenses that should be shown on the expense listing. They will send a 1099-MISC to you to report the rent you received for your properties after their expenses were deducted.