Issuing 1099 to Contractors on rehab

[Wes Aldo]

I flipped 2 properties last year and so far have flipped 2 properties this year in my own individual name. I filed federal income taxes as short term capital gain on Schedule D. I did not issue any 1099's for the contractors that did work on the properties. Is issuing 1099s for workers necessary when only doing a couple rehabs in your own name?

Also, if I start doing more properties then I will probably form an LLC and would like to know what is the penalty for not filing 1099s in that situation as an LLC?

Thanks all in advance.

[Wayne Brooks]

@Wes Aldo 

Get a CPA now.  Income from flips is Not short term cap gains.  It is ordinary income, plus both sides of social security/med. You're going to have some serious penalties and interest if audited.  Yes you need to issue 1099's.  It's the only way you can deduct these expenses if audited.