1099-int issued by whom to who?

[newbie]

Took the dog for a walk, tried to clear my head after a hectic day. Got myself more confused. Thinking this really doesn't apply to any of my clients...........

...........Thought some more, maybe it does.

Would it apply to land contracts? I have a couple of Schedule C filers that have land contracts, should a 1099INT have been prepared and issued to the person receiving the payment for the amount of interest paid during the year? The receiver of the monies are nonbusiness individuals.

[veritas]

When in doubt

fill it out.

Kidding

In my opinion a business paying interest over $600 on a land sales contract should complete a 1099-int if the recipient is not incorporated or a trust.

[newbie]

fill it out.

Kidding

I'm beginning to think this to be the way to go. You guys talking about all these preparer penalties in other threads is starting to make me nervous.

[S T]

I am like Newbie

I am so confused on this post.

All I can share is that I issue 1099 INT forms on businesses as payer/payor to any individual for individual loans to the business, private money or investors. Schedule C, Form 1065, 1120 forms.

I guess my thinking is better to be safe and issue to protect the deduction for the business owner.

Sandy

[veritas]

Regs. Sec. 1.6041-1

"a) GENERAL RULE.

(1) INFORMATION RETURNS REQUIRED

(i) PAYMENTS REQUIRED TO BE REPORTED. Except as otherwise
provided in sections 1.6041-3 and 1.6041-4, every person engaged
in a trade or business shall make an information return for each
calendar year with respect to payments it makes during the
calendar year in the course of its trade or business to another
person of fixed or determinable income described in paragraph
(a)(1)(i)(A) or (B) of this section. For purposes of the
regulations under this section, the person described in this
paragraph (a)(1)(i) is a payor.

(A) Salaries, wages, commissions, fees, and other forms of
compensation for services rendered aggregating $600 or
more.

(B) Interest (including original issue discount), rents,
royalties, annuities, pensions, and other gains, profits,
and income aggregating $600 or more. "



An example from the regulation.


" For example, a closely held corporation borrows money from one
of its officers on a promissory note not in registered form
bearing annual stated interest of $300. The corporation also
pays royalties to the officer amounting to $400 a year. An
information return is required under this paragraph (a)(1) to
report the payments to the officer because the interest does not
come within the definition of interest in section 1.6049-5(a)
and the aggregate of interest and royalties exceeds $600."

I was wrong earlier when I referred to the $10 threshold.

[S T]

Thank you

Veritas, as usual, thank you for your post!

Sandy