Landlords With New 1099 Tax Filing Requirements

By
Real Estate Sales Representative with Coldwell Banker Previews, Irvine, South OC

If you are a commercial or residential landlord, you will have new 1099 tax filing requirements with the Internal Revenue Service IRS starting in 2011.  IRS logo

Landlords (whether professional or casual) need to 1099 the service providers to whom they paid $600 or more during the calendar year.   It's new that the casual landlord, not just the professionals, must 1099 service providers. 

landlord tax filingsLandlords must send a 1099 to all service providers who received payments of $600 or more during the year, such as plumbers, carpenters, gardening services, and repair people.

This new requirement applies to owners of both residential and commercial property.  The exception to this new requirement is when an owner temporarily rents out his/her primary residence, as long as the owner's income does not exceed a "minimal" amount to be determined by the IRS.  1099 tax filings now required

Prior to 2011, this 1099 tax filing requirement only applied to people involved in full-time property management.  This new filing requirement covers all landlords (including small investors).  So Landlords will need to gather federal tax ID numbers from their service providers in order to file the 1099s with the IRS. 

The National Association of REALTORs® opposed this change in the law and then worked for its repeal or modification.  

If you want information or have questions about your situation and this 1099 filing requirement, contact the Internal Revenue Service.

________________________________________________________________

This is for information only and not the providing of tax or legal services.  If you want or need more information, please contact your income tax professional or the Internal Revenue Service.

Harrison K. Long - Business Solutions and Advisory - REALTOR® and broker associate, Coldwell Banker Residential Brokerage, Irvine, CA - 949-854-7747 (phone) - CA DRE 01410855 - ExploreProperties@gmail.com (email) 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Chuck Carstensen 12/04/2010 01:13 PM
  2. Todd & Devona - Garrigus Real Estate 12/04/2010 01:28 PM
  3. Devona Garrigus 12/05/2010 12:55 PM
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landlords new 1099 tax filing requirements

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Rainmaker
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Michael J. Perry
RE/MAX Associates of Lancaster, PA. - Lancaster, PA
Lancaster Relo Specialist

Great post, I'm suggesting it !!!! Another reason to use compentent and professional property management !!!!

Dec 04, 2010 01:01 PM #1
Rainmaker
1,009,073
Michael J. Perry
RE/MAX Associates of Lancaster, PA. - Lancaster, PA
Lancaster Relo Specialist

Great post, I'm suggesting it !!!! Another reason to use competent and professional property management !!!!

Dec 04, 2010 01:02 PM #2
Rainmaker
1,009,073
Michael J. Perry
RE/MAX Associates of Lancaster, PA. - Lancaster, PA
Lancaster Relo Specialist

Great post, I'm suggesting it !!!! Another reason to use competent and professional property management !!!!

Dec 04, 2010 01:03 PM #3
Rainmaker
729,326
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert

Good to know.  I will pass this along to people I know that might want to read this.

Dec 04, 2010 01:10 PM #4
Rainmaker
480,521
Harrison K. Long
Coldwell Banker Previews, Irvine, South OC - Irvine, CA
business, REALTOR , GRI, Broker

Michael ... You are so right that landlords should at least consider using professional property management and make sure that satisfy the IRS on 1099 tax filing requirements.

Dec 04, 2010 01:15 PM #5
Rainmaker
480,521
Harrison K. Long
Coldwell Banker Previews, Irvine, South OC - Irvine, CA
business, REALTOR , GRI, Broker

Chuck ... Thanks for checking in on this subject of landlords with new 1099 tax filing requirements. Hope you are doing well.

Dec 04, 2010 01:15 PM #6
Rainmaker
517,201
Todd & Devona - Garrigus Real Estate
Coldwell Banker Kivett-Teeters - Beaumont, CA
Southern California REALTORS®

Harrison - Excellent post. I have suggested it for a feature. And thank you for allowing the re-blog option for all of us to pass it along! I am re-blogging now...

Dec 04, 2010 01:24 PM #7
Rainmaker
296,214
Drick Ward
NEPTUNE REALTY - Virginia Beach, VA
"RealtorDrick" - Experienced Representation

Your information is actually a tad incorrect or misleading.  IRS form 1099 is prepared by the person making payments.  A copy is sent to the IRS so they are aware the receiving party got those funds and report them on their taxes, and a copy is sent to the person who received the money so they are aware the IRS will be expecting them to claim the income.  Landlords (whether professional or casual) do not need to 1099 their tenants, they need to 1099 the service providers to whom they paid $600 or more during the calendar year.  The new part of the requirements is that now the casual landlord, not just the professionals, must 1099 these service providers.  This is, however, another reason homeowners (even those with only one property - the ones I'm calling "casual landlords") should hire professional management because the responsibility then transfers to the property manager for filing necessary documentation with the IRS.

Dec 04, 2010 01:30 PM #8
Rainmaker
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Harrison K. Long
Coldwell Banker Previews, Irvine, South OC - Irvine, CA
business, REALTOR , GRI, Broker

Hello to Garrigus Real Estate ... Thanks for your support about my article on landlords new 1099 tax filing requirements.

Dec 04, 2010 01:57 PM #9
Anonymous
Anonymous
demetria

I am a tenant. my landlord is using turbo tax to file his taxes. does he need my social security number in order to file his taxes?

Mar 07, 2011 10:51 PM #10
Rainmaker
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Harrison K. Long
Coldwell Banker Previews, Irvine, South OC - Irvine, CA
business, REALTOR , GRI, Broker

Demetria (comment #7) ... This new 1099 tax filing requirement goes into effect for the 2011 tax year, and deadline for those filings would be April 15, 2010.  So starting January 1, 2012, landlords will need to have get SSN information for tenants and for those to whom they make payments of $600 or more.

Mar 08, 2011 01:50 AM #11
Anonymous
Anonymous
Larry Shepherd

I own a property management company, and have been in the business for many years. Your article is absolutely wrong, there is no requirement to give a copy of the landlord's 1099 (owner's draw) to the tenants.

Why would this information have anything to do with the tenants? Issuing 1099s to vendors, who have been paid in excess of $600, has been a standard practise for many many years. The same goes for issuing 1099s, or K1s for partnerships, to owners.

The link in your article to the National Assoc of Realtors says nothing about your claim of having to give tenants copies of 1099s.

Jan 18, 2012 02:22 PM #12
Anonymous
Anonymous
RedRock Property Management

And to comment further on how false your claim is in this matter, the only reason for gathering tax IDs or social security numbers from tenants, would be to file individual 1099s FROM the tenant TO the landlord for rents paid, NOT from the landlord to the tenant.

What would give a property management company or landlord, the lawful right to act as an agent for the tenant, and file a 1099 to the IRS on their behalf? How could a landlord, or PM company, sign the 1099 transmittal form for a tenant, without written permission to do so?

1099s or K1s are for reporting monies PAID to an individual, sole proprietorship, or corporation.

And how could all these landlords, track down all the tenants that have moved out, or been evicted, throughout the year, to obtain their tax ID numbers? You assume that all landlords run credit checks and have the tax id numbers on file, many do not.

Jan 18, 2012 02:47 PM #13
Anonymous
Anonymous
Michelle R.

This article is entirely misleading, and people are reading it and thinking that they have to do this.  As a public accountant, I am asking you to remove it, and to check your facts before you write anything else.  1099s are issued to people you pay money to, and 1098s are issued to people you receive money from in certain situations.  Your tenants are not one of these situations.  If you privately hold a mortgage and someone is paying you mortgage payments, then you will issue them a 1098 for the interest portion only.  Rental income?  No interest received.  To all tenants: do not give your tax identification information to your landlord unless they are doing a credit check on you and provide you with appropriate information. 

Mar 21, 2012 11:17 AM #14
Rainmaker
480,521
Harrison K. Long
Coldwell Banker Previews, Irvine, South OC - Irvine, CA
business, REALTOR , GRI, Broker

Michelle ... Thanks for your comment, and it's good that you are an income tax expert.  

I posted my article on December 4, 2010 (almost 16 months ago), after reviewing information provided by REALTOR.org and recommended that any person with questions about whether or not they must file 1099s should contact the IRS.

"If you want information or have questions about your situation and this 1099 filing requirement, contact the Internal Revenue Service."

What you said is correct that "1099s are issued to people you pay money to, and 1098s are issued to people you receive money from in certain situations".  I have edited my article here with that clarification.

 

 

 

 

Mar 21, 2012 12:11 PM #15
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Harrison K. Long

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