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

Question

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

WAYNE G. · Answer

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.

Sante R. · Answer

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

Steven Hamilton II · Answer

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.

Steven Hamilton II · Answer

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.

Sante R. · Answer

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.

Steven Hamilton II · Answer

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.

Sante R. · Answer

@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 !

Steven Hamilton II · Answer

@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.

Sante R. · Answer

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

Steven Hamilton II · Answer

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.

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

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