Tax question for rental

[John Morgan]

I have a couple tenants in dIfferent propertIes who pay me rent in cash. I’ve had them do work on the properties for free rent without any documentation. Is this a problem? I also pay them to do work on my other rentals for credit off their rent. They are handymen/construction workers and have been a life saver dealing with just about any maIntenance problem that comes up. But my bookkeeping is a little weak. I assume I can just claim less rent collected from them, but not able to write off their labor for the work? Also if I pay someone over $600 for work, do I need a 1099 on them if I claim their work as a tax write off?

[Basit Siddiqi]

@John Morgan

I disagree with comments above.

You should report the gross revenue and gross expenses.
The net result will be the same but this is the accurate method of reporting.

Therefore, you will report as income the credits you provided to tenants for fixing the places. You would also report the expense.

You may or may not be required to issue a 1099. If you operate a trade or business; you are required to issue a 1099 if there is a payment in excess of $600 paid to any one person.