Rental Income

[Jiggers]

Under a different thread, a link to the Small Business Bill that was just passed is posted.

A CCH shortened version.

On page 5, middle column, "Information Reporting on Rental Property Expense Payments":

"The bill requires qualified individuals receiving rental income from real property to file information returns with the IRS and to service providers,,,,,,"

Please explain.

Does that mean that someone that has a rent house, and rents to an individual, that the owner of the house must issue a 1099 to the person renting the house?

[solomon]

Please explain.

Does that mean that someone that has a rent house, and rents to an individual, that the owner of the house must issue a 1099 to the person renting the house?

No. It means the Landlord must issue 1099 to a service provider if paid the thresh hold amount - e.g. a plumber.

[solomon]

From the Joint Committee on Taxation

Under the provision, recipients of rental income from real estate generally are subject to
the same information reporting requirements as taxpayers engaged in a trade or business. In
particular, rental income recipients making payments of $600 or more to a service provider (such
as a plumber, painter, or accountant) in the course of earning rental income are required to
provide an information return (typically Form 1099-MISC) to the IRS and to the service
provider. Exceptions to this reporting requirement are made for (i) members of the military or
employees of the intelligence community (as defined in section 121(d)(9)) who rent their
principal residence on a temporary basis, (ii) individuals who receive only minimal amounts of
rental income, as determined by the Secretary in accordance with regulations, and (iii)
individuals for whom the requirements would cause hardship, as determined by the Secretary in
accordance with regulations.

[Jiggers]

Thanks

No. It means the Landlord must issue 1099 to a service provider if paid the thresh hold amount - e.g. a plumber.

You cleaned up a brain freeze.

Dumb me.

[solomon]

I would not be surprised to see this reporting repealed.

[ChEAr$]

I would not be surprised to see this reporting repealed.

Also wouldn't be surprised, but I kinda doubt it will be. After all, it's not to raise taxes, but
to insure accurate tax returns. (grin)

[solomon]

When this does go into effect, any trade or business that pays a service provider with a credit card or debit card will be exempt from the 1099-MISC reporting requirement. The issuance of a 1099-K by the merchant bank to the service provider will be adequate.

[Uncle Sam]

Rental Expenses - 1099 reporting

How does Congress believe every landlord is going to be able to obtain the EI# of the utility company, the water company, the local receiver of taxes, the postmaster, the fire/ambulance district?

Didn't they consider into the law - a provision that would require them to provide it automatically - even if it would require disclosing on a bill?

[BHoffman]

...Didn't they consider into the law...?

They did not even read the law.

[Uncle Sam]

Rental Expense-1099 Reporting

A couple of more wrinkles I thought about -

If there's a mortgage on the property - does the owner send a 1099 to the mortgagor for principal (as the bank sends 1098 for mtge interest), and if taxes are paid out of escrow - who does the 1099 get made out to - bank or receiver of taxes?, and - in local areas like mine (NY) where school and library taxes are paid via the local receiver of taxes - who gets the 1099 - bank or school/library?

This is going to be some nightmare.