I entered into a lease with a solar company on my farm. Per the Lease they pay me "rent" monthly based on the number of acres that are developed. I received 2 rent payments from the company however payment was handled by 2 different entities. The first payment was by the original company and the second and all future payments are by their financial arm. I received 2 separate 1099s on from each entity for different payments. One was for the first months payment and was on a 1099misc and they reported this rent as other income in box 3. The second was for the second months payment and was reported on a 1099NEC in box 1 nonemployee compensation. Neither of these seems correct to me and I thought it would be shown on a 10099 misc in box 1 Rents. Any advice on what is the correct way this should be reported?
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You would be able to use the 1099-MISC to report the rent that you received for the solar use of your farm. Ideally, this would be in Box 1, but it can be entered in the Schedule E for rental property. Form 1099-NEC is not to be used for rents. You should get a corrected form on a 1099-MISC. See the following information in the IRS publication: Form 1099 Information Page 1 states that rents are to be shown on 1099-MISC, Box 1; and page 7 shows when Form 1099-NEC should be used.
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