Should I 1099 myself if I am my own property manager?

[Aaron Van Curen]

If I own a property under a LLC and pay myself 10% of the monthly rent, which would add up to more than $600 per year, do I have to send myself a 1099 for being the property manager even though I am the sole owner of the property? I run the property managment as a DBA, Lovely Living Property Management, so that I can hide my identity but it's not incorporated at all. Thanks for the replies!

[Natalie Kolodij]

Originally posted by @Aaron Van Curen:

@Natalie Kolodij Well, I bought the property under a single-member LLC so I have a separate bank account for everything relating to the rental. I figured I would legally have to charge the LLC a management fee if I wanted to get paid for managing. I leave the rest of the rental income in the bank account for any future expenses.

Is there a more simple way to do this?

Just don't pay yourself for managing your own rentals. 

Here is what's happening. 

You make $500 from a rental (Sch E) - this would be taxed at ordinary income tax rate with no B&O or SE taxes

You make $500 (Sch E) and pay yourself $100 to manage it (Sch C). 

Now Sch E pays ordinary income tax on $400 instead of $500

And Sch C pays ordinary income taxes, B&O Taxes, and 15.3 % SE taxes on the $100 you paid yourself to manage. 

You still made $500. But now you paid more taxes for no reason.

As mentioned above a single member LLC is disregarded entity per the IRS. You're allowed to do work for it yourself, as far as the IRS is concerned it's you.