Investor · Bayside, NY · Member since 2014 · 45 posts · 14 votes
I own properties in Nevada, and more recently I purchased my first property in Indiana. Is it normal for a property manager to ask for your social security number? Back when I purchased my first few properties in Nevada, I hesitantly provided my property manager with my social security number (I say hesitantly because I'm always thinking about the risks of giving out my personal information such as identity theft, etc). Now that I purchased a property in Indiana, I had to find a new property manager, and once again I'm being asked for my social security number. All of my properties are financed personally, with title on my name (with an umbrella policy of course).
My other question is whenther the property manager is supposed to issue a 1099 for your GROSS rental income before they deduct their fees and other expenses? Or is the 1099 supposed to be for the NET rental income you received after deducting fees and other expenses? Now that I'm dealing with more than one property manager in more than one state, I'm getting different information. Any information/advice would be helpful. Thanks
Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
11y
The property manager NEEDS your SSN to issue the 1099, and yes, it should be for the gross rental income accompanied by an accounting of all the expenses they paid on your behalf.
Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
11y
The property manager NEEDS your SSN to issue the 1099, and yes, it should be for the gross rental income accompanied by an accounting of all the expenses they paid on your behalf.
Residential Real Estate Broker · Saint Louis, MO · Member since 2014 · 1k+ posts · 567 votes
11y
I agree with dawn.
The amount of rent you should report or get a 1099 for is the gross amount of rent you the owner receives before any deductions before management fees or other expenses.
The you the owner will deduct those expenses from the gross income on his own when he files his/her taxes.
As an example, assume the gross rent paid is $1,000 per month and no other expenses paid by the management co there fee is 10% ($100 a month for management fees) and only send him a check for $900. The management co sends you a 1099 to report the gross rental proceeds of $12,000 for the year. When you the property owner files taxes, he reports the $12,000 he received as rental income, and then claims a deduction for the $1,200 he paid in management fees. He still ends up only paying taxes on the net rental income after the fees are deducted, but this is the way it must be reported. The Management company cannot simply report to you the net proceeds that were paid. His actual rental income is the gross amount charged to the tenant. The management fees are a separate expense which must be accounted for as a separate deduction.
The property manager NEEDS your SSN to issue the 1099, and yes, it should be for the gross rental income accompanied by an accounting of all the expenses they paid on your behalf.
That is exactly what I receive from my property manager in Nevada every year. I was getting confused because of some wrong information i was given by another property manager. Thank you for your response.
The amount of rent you should report or get a 1099 for is the gross amount of rent you the owner receives before any deductions before management fees or other expenses.
The you the owner will deduct those expenses from the gross income on his own when he files his/her taxes.
As an example, assume the gross rent paid is $1,000 per month and no other expenses paid by the management co there fee is 10% ($100 a month for management fees) and only send him a check for $900. The management co sends you a 1099 to report the gross rental proceeds of $12,000 for the year. When you the property owner files taxes, he reports the $12,000 he received as rental income, and then claims a deduction for the $1,200 he paid in management fees. He still ends up only paying taxes on the net rental income after the fees are deducted, but this is the way it must be reported. The Management company cannot simply report to you the net proceeds that were paid. His actual rental income is the gross amount charged to the tenant. The management fees are a separate expense which must be accounted for as a separate deduction.
I hope this helps
That was a little confusing with "you the owner" and then interchanging between "you" and "he" but I think I get what you're saying. Thanks
Investor · Bayside, NY · Member since 2014 · 45 posts · 14 votes
11y
This whole 1099 thing is strange. I know at one point I was required to issue a 1099 to the property manager as well since I was paying them over $600 a year in fees. However, I believe this part of regulation was repealed at some point since I am only a landlord and not a real estate professional.
Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
11y
@Raj S. I think you really should consult with your CPA on some of these questions. The property manager should have had you fill out a W-9 form for tax purposes.