Does anyone have any information on Landlords using 1099-C form?

17 Replies

Since it's so hard to collect from tenants who owe, or in some cases not really worth trying to collect, I would like to know more on being able to use the 1099-C "cancellation of debt" form. All responses appreciated

On page 3 of http://www.irs.gov/pub/irs-pdf/i1099ac.pdf it looks like the "Who Must File" consists of financial institutions and lenders. Are you sure a landlord would use this form? @Steven Hamilton II   may have some idea. 

Landlords are cash basis and cannot issue a 1099-C. You simply include it in income. Granted you can threaten a tenant with it to make them freak out.  But that can be frowned upon in court.

Medium hta logoSteven Hamilton II EA, Hamilton Tax and Accounting | [email protected] | (224) 381‑2660 | http://www.HamiltonTax.Net

Originally posted by @Chris Martin :

On page 3 of http://www.irs.gov/pub/irs-pdf/i1099ac.pdf it looks like the "Who Must File" consists of financial institutions and lenders. Are you sure a landlord would use this form? @Steven Hamilton II   may have some idea. 

 @Chris Martin @Steven Hamilton ll, I read somewhere where you don't necessarily have to be a "Lending Institution"...I think it was under the "Safe Harbor" rules though.(?)

Originally posted by @Steven Hamilton II :

Landlords are cash basis and cannot issue a 1099-C. You simply include it in income. Granted you can threaten a tenant with it to make them freak out.  But that can be frowned upon in court.

 @Steven Hamilton ll I read somewhere that you don't necessarily have to be a "Lending Institution"  I think it was in the "Safe Harbor" rules section. (?)

Sorry, trying to work this from my so called "smart phone"

Originally posted by @Steven Hamilton II :

Landlords are cash basis and cannot issue a 1099-C. You simply include it in income. Granted you can threaten a tenant with it to make them freak out.  But that can be frowned upon in court.

 @Steven Hamilton II what do mean include it as "income" ?  income not received ?  

speaking of 1099, strictly as a landlord, do i have to give 1099 forms to my contractors?

i pay them by check, if that matters..

George: If you paid a contractor over 600 you need to issue a 1099-MISC. There is a Jan 31 deadline.  I use expresstaxfiling.com to generate the forms, as the IRS is very picky about scanning them.

1099C is for bad debts.  An unpaid judgement is a bad debt.  I do not see why a landlord would not be considered a creditor that is owed a sum, follows their procedure to stop efforts to collect the debt (>$600), and files a 1099C.

Originally posted by @WAYNE G. :

George: If you paid a contractor over 600 you need to issue a 1099-MISC. There is a Jan 31 deadline.  I use expresstaxfiling.com to generate the forms, as the IRS is very picky about scanning them.

1099C is for bad debts.  An unpaid judgement is a bad debt.  I do not see why a landlord would not be considered a creditor that is owed a sum, follows their procedure to stop efforts to collect the debt (>$600), and files a 1099C.

 thanks, wayne..

what about if they dont have EIN's and dont want to give me their SSN's? 

yes, i am not ashamed to admit i use guys that cost less. :)

Originally posted by @George P. :
Originally posted by @Wayne G.:

George: If you paid a contractor over 600 you need to issue a 1099-MISC. There is a Jan 31 deadline.  I use expresstaxfiling.com to generate the forms, as the IRS is very picky about scanning them.

1099C is for bad debts.  An unpaid judgement is a bad debt.  I do not see why a landlord would not be considered a creditor that is owed a sum, follows their procedure to stop efforts to collect the debt (>$600), and files a 1099C.

 thanks, wayne..

what about if they dont have EIN's and dont want to give me their SSN's? 

yes, i am not ashamed to admit i use guys that cost less. :)

 George,

Landlords are not required to issue 1099s; however, I highly recommend it as an audit prevention measure.

Before you write the check make sure they fill out the form. 

Medium hta logoSteven Hamilton II EA, Hamilton Tax and Accounting | [email protected] | (224) 381‑2660 | http://www.HamiltonTax.Net

Originally posted by @WAYNE G. :

George: If you paid a contractor over 600 you need to issue a 1099-MISC. There is a Jan 31 deadline.  I use expresstaxfiling.com to generate the forms, as the IRS is very picky about scanning them.

1099C is for bad debts.  An unpaid judgement is a bad debt.  I do not see why a landlord would not be considered a creditor that is owed a sum, follows their procedure to stop efforts to collect the debt (>$600), and files a 1099C.

 Wayne,

The reason is 99.99% of landlords are cash basis that means you do not need a deduction for the unpaid rent as it is simply was never included in income to begin with.

Medium hta logoSteven Hamilton II EA, Hamilton Tax and Accounting | [email protected] | (224) 381‑2660 | http://www.HamiltonTax.Net

Originally posted by @Steven Hamilton II :
Originally posted by @Wayne G.:

George: If you paid a contractor over 600 you need to issue a 1099-MISC. There is a Jan 31 deadline.  I use expresstaxfiling.com to generate the forms, as the IRS is very picky about scanning them.

1099C is for bad debts.  An unpaid judgement is a bad debt.  I do not see why a landlord would not be considered a creditor that is owed a sum, follows their procedure to stop efforts to collect the debt (>$600), and files a 1099C.

 Wayne,

The reason is 99.99% of landlords are cash basis that means you do not need a deduction for the unpaid rent as it is simply was never included in income to begin with.

 not as a deduction for the Landlord but as one poster on BP said, it would count as "income" that rhe renter would have to pay taxes on..!  IDK

@Sante R.  probably not likely for a tenant who is not paying you. They are probably insolvent and therefore can exclude it from income for that reason.

All I am is saying is it is really not worth your time. However, the best use would be as a scare tactic to get them to pay.

Medium hta logoSteven Hamilton II EA, Hamilton Tax and Accounting | [email protected] | (224) 381‑2660 | http://www.HamiltonTax.Net

Originally posted by @Steven Hamilton II :

@Sante R. probably not likely for a tenant who is not paying you. They are probably insolvent and therefore can exclude it from income for that reason.

All I am is saying is it is really not worth your time. However, the best use would be as a scare tactic to get them to pay.

 @Steven Hamilton II this tenant has 2 jobs. She skipped out after 3 months b/c she didn't like the kitchen in the house. Then told me she would file BK if I tried to take her to court. Lol ! 

Originally posted by @Steven Hamilton II :

Did she move out or stop paying? Get a new tenant and there you go. Half the time the problem is getting rid of them.

You're right Steven, I got a tenant in 2 months later, thank God but it was really "Sressful" and some of these tenants just have "nerves"......... I thought as an LLC or just having an EIN I would be able to legitimately send her this 1099-C since the amount is wayyyy over $600.