Approved Tenant requires Owner's SSN/Taxpayer ID for 'Reporting' purposes

44 Replies

does the approved tenant (for one of the 2 units in a legal duplex) have legal grounds to be demanding the owner's (landlord's) taxpayer id? 

tenant explanation is that intends to file a 1099 for each year she is owner's tenant to make sure rent paid is being reported as rental income and not 'written off' =D

No, a tenant does not need the owner's SS# for anything. They can claim renter's credit without it. It is none of their business if you are claiming the income or not. I've never heard of a tenant filing a 1099. 

Account Closed

Interesting one.  I haven't had a tenant, and am not a CPA, but found this article discussing it:

http://homeguides.sfgate.com/apartment-owners-1099...

From article:

There are no federal tax credits for tenants of rental residences. As a landlord of a rental residence you might encounter a tenant that tries to give you a 1099-MISC for rents paid. Landlord attorney James McKinley, in a 2007 "Inman News" article, says that rental residence tenants insisting on giving their landlords1099s may be trying to intimidate them. Landlords of rental residences should also never give their Social Security numbers to tenants, especially when they claim they need to give their landlords 1099s.

Now they quoted a 2007 article and laws changed in 2010, but I don't see any references to a requirement for tenants to issue to landlords.  Would also love to know if anyone in California knows about this one.

Updated over 3 years ago

[edit: meant to say I haven't had a tenant *ask for this*]

Updated over 3 years ago

[edit: meant to say I haven't had a tenant *ask for this*]

No, the tenant does not need this info, nor are they entitled to it. While there is no federal tax credit for rent payments, there is a small ($60) rent credit available in California if the tenant meets certain criteria. But there's no need/requirement for the tenant to file a 1099 that purpose. 

I believe if the rental unit is being used for the tenant's business or trade, then yes, they'd file a 1099, but if it's personal use, then no 1099 necessary.  If she is requesting it anyway, just to make sure you report her rent, then I'd politely decline and let her go elsewhere if she wants to.  Even though I do report all rents and there are leases to show what those are, that's between me, my accountant, and the IRS, not the tenant's concern, at least until my accountant tells me it's required.  

Originally posted by Account Closed:

does the approved tenant (for one of the 2 units in a legal duplex) have legal grounds to be demanding the owner's (landlord's) taxpayer id? 

tenant explanation is that intends to file a 1099 for each year she is owner's tenant to make sure rent paid is being reported as rental income and not 'written off' =D

She intends to send the landlord a 1099 because she's paying them rent? Or did I misunderstand this? She seems to be implying that the landlord is not declaring rental income, which is certainly none of her business. And she seems confused that if it's not being reported, it's being "written off". How is something written off if it's not reported? 

Or maybe I'm confused ;)

Sounds nutty of course, there are a few of those out there. You aren't required to furnish your SSN and I would politely decline. If she wants to push the issue, tell her to file her taxes and enclose a copy of the lease:) Sheesh: landlording can be tough enough with the additional burden of this bulloney!

indeed she said she's concerned her rent might not be reported and thus 'written of' (the books, apparently) unless she was talking about it being written off as a 'loss' (which i of course agree isn't any of her 'business)

i already told her we don't give the owner's personal info out like that and she mentioned she just formed a corporation for her side consulting business and will be using the apartment for occasional client visits and wants to keep her business expenses written off (she likes that word/term?) by accounting for the portion of her rental that is used for occasional business at home and that it exceeds 600/yr so she needs to issue owner a 1099. 

she also mentioned not wanting her rent to go 'under the table' and that she doesn't like the idea of any secret slumlord diverting her rental income overseas tax-free maybe even for terrorism back home.

cringe and she already signed the contract and was given the keys! but i will continue to refuse bothering owner for ss# unless this 'partial business use' reason is kosher.. is it?

Clearly, the tenant needs to talk to a CPA.  She cannot write off "rent expense" for the business portion of her personal residence.  What she can do is take a home office deduction.  In neither circumstance would this indicate that she should be issuing a 1099.  

A - 1099s are issued to landlords of commercial space by their commercial tenants. 1099s are issued to landlords of residential space when they receive it from a County Housing Authority (not always, but in many areas). I was also issued a 1099 for rental income back when I was receiving rental income directly from a FEMA organization after Hurricane Katrina.

B - There is no requirement for a residential tenant to issue a 1099 to a residential landlord.  

Tell the tenant to pound sand.

Tell her to have her lawyer call your lawyer, and she can pay for your lawyer's time as well, to explain to her why she can't have it.

Otherwise, the answer is no.

This is going to be a fun tenant.

By the way, is it allowed in her lease to have a business in the property?

@neil 

Account Closedtell her you'll exchange your Tax ID for her debit card pin #. 

I have not filled out a W-9 for a tenant but I have for a business or non profit that is paying rent on their behalf or if the business rents the property for use by residents the choose. So in this case I would not grant this request. She pays with checks and/or you provide reciepts so that all she needs for her home office deductions. As far as reporting the income, just tell her that you report the income, not because it is the right thing to do but because you also need that documentation to qualify for loans. If the income wasn't reported then no one would loan you money with the expenses listed...

Account Closed

  If your lease does not have terms stating business activities are not allowed on premises, then this might be a valid concern for her as I believe she would have to issue a 1099 if she says she's paying you more than $600 this year for business purposes.   If it does state no businesses allowed, then not only do you not have to provide the info, but you can inform her she would be in violation of your lease if she runs any business out of there, especially if it compromises your landlord policy and liability issues. 

I agree with other comments above - does the lease permit her to run a business out of your unit?  What about liability issues for the landlord?  Do you require her to have insurance for this business, since she'll be having strangers come over for this business?  Is there sufficient parking for her clients?

thanks guys n gals yep the lease agreement in this instance that she just signed says leased premises are for residential use not business use.. her argument is occasional client visits to her home are normal in her profession.

we are still sticking to the presiding reasoning that disclosing the owner's SS# isn't warranted as the lease prohibits business use, thanks but she is being persistent and threatened to petition IRS that our owner's rent roll should be 'audited'! 

she was given keys yesterday with the 11 days this month prorated and paid for.

in california, after signing a lease, how long does a client have, if any, to 'change their mind' after signing a lease? she says she did not inspect the property thoroughly since she just relocated from norcal and is wondering if there is a 48 or 72 hours period where she can change her mind considering her suspicions of the landlord not wanting to give out his ss# and also she noticed things like the hot water takes too long to run, etc after already given the keys and signing the lease and paying the sec deposit and the move in special which was the rent for the rest of this month and her full month is due june 1.

Let her go and give her the money just to be rid of the headache. But she must go immediately to get any money, and I would call it good riddance. 

If she has changed her mind about living there, then let her go! That choice is up to you, not a law! She sounds awful. She's doing you a huge favor if she's changed her mind about living there.

Hallelujia!  Vaya con Dios!  Don't let the screen door hitcha...

And aren't 1099s for independent contractors?  I haven't looked it up, but my understanding of the $600 rule, is to show the person is not your employee.  Seems like it wouldn't have anything to do with rent anyway.

She's also accusing you of not reporting your rental income as taxable income on your tax return immediately after moving in. This is not her business what you do with your personal financial management. Further, reporting your landlord to the IRS to be subjected to auditing is the lowest of the low and you might want to consider de-escalating the tension and state that those actions would not set a friendly tone in the tenant/ landlord relationship, given that she will have to interact with you regularly for repairs, rent checks and other issues. But if she wants out, certainly allow her to do so. she sounds awful and has chosen to be the self righteous citizen IRS agent/ crazy pants.

Next time, be sure to do a walkthrough with tenant before you hand over keys, perhaps at lease signing while unit is vacant, and fill out a unit inspection sheet (check the BP forms section). This way tenant signs over acceptance of unit condition and condition of all items will be listed. These complaints would be unfounded by the tenant if there were an inspection sheet signed by tenant.

Agreed.  Let her go.  She sounds like a nightmare.

FLY!  BE FREE!

Image result for fly be free

Originally posted by @Steve Babiak :

Let her go and give her the money just to be rid of the headache. But she must go immediately to get any money, and I would call it good riddance. 

 Shame I can only vote once for this post!!! I'd pay her to leave, it's only going to get worse!!!

Originally posted by @Sue K. :

Hallelujia!  Vaya con Dios!  Don't let the screen door hitcha...

And aren't 1099s for independent contractors?  I haven't looked it up, but my understanding of the $600 rule, is to show the person is not your employee.  Seems like it wouldn't have anything to do with rent anyway.

 Rents over $600 paid by a business must be reported on a 1099misc.

Originally posted by @Sylvia B. :
Originally posted by @Sue Kelly:

Hallelujia!  Vaya con Dios!  Don't let the screen door hitcha...

And aren't 1099s for independent contractors?  I haven't looked it up, but my understanding of the $600 rule, is to show the person is not your employee.  Seems like it wouldn't have anything to do with rent anyway.

 Rents over $600 paid by a business must be reported on a 1099misc.

 Interesting.  But would that include a home business?  I took deductions for home business expenses for years, including a percentage of my rent, and never needed a 1099.

So, is she trying to write off her full home rent, as if it's a separate business paying a commercial rent - separate from her residence?

Something doesn't make sense to me here.  But, hey, I'm no CPA :-)

@Sylvia B. @Sue K. mentioned, the appropriate way to report the business use of the home is the Home Office Deduction, which again doesn't require a 1099.

Originally posted by @Steve Babiak :

Let her go and give her the money just to be rid of the headache. But she must go immediately to get any money, and I would call it good riddance. 

 I'm with Steve. Cut her loose!  She is giving me a headache just reading about her.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here