should I issue 1099's as a landlord

3 Replies

Hello all, I have a question regarding issuing 1099's. This has been the most difficult question to get answered even from cpa's. I understand the general rule of giving a 1099 for work performed over $600 but, after hours of research, I understand that this doesn't apply to landlords. Congress repealed having to issue 1099's for landlords in 2011 with bill HR4 but no cpa that I have spoken to has ever heard of it. I am not a real estate professional according to the IRS and I feel that my rental company is considered a passive activity in that I don't meet any of the 7 tests of material participation. My simple question is, am I required to issue 1099's? Thank you in advance for any insight.

You are not required to as a landlord.. That section was repealed. 

@Scott Parker

It's more complicated than that. You're not required - unless your rental activity rises to the "trade or business" level. (Not the same as RE Pro, by the way)

In the past it was not that important, except that the IRS could potentially object to your business overhead deductions like training and marketing.

These days, with the new 20% deduction, it becomes important. You now WANT to be trade or business - if you show net income. If you show net loss - does not matter. 

My new recommendation for net-positive landlords is to issue 1099s. It will be another argument supporting "trade or business" for 2018 and beyond, in order to qualify for the 20% deduction.

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