1099-MISC and rental activities

[Jesse]

I have mixed feelings because as it is with many controversial issues some innocent will suffer the consequences.

There are those on unemployment that really can't find a job and there are those that are really not trying or they are "working on the side" to supplement their benefits "putting a little extra cash" in their pockets. There are divorced couples who have children receiving free lunches, free tuition, free insurance or other benefits because the parents "play the game" and go with the lesser of the two incomes. Every year during the tax season I tell my husband I want a divorce!

I've gone through my rental clients and most take care of their own properties and will not pay $600 out to any subcontractor unless the building becomes in need of major repairs for some reason.

[BHoffman]

My 2 cents:

The more stringent reporting requirement is all nice and dandy, and yes, I am all for everyone paying their fair share of taxes BUT one thing is the reporting (probably scares the sh... out of some. Another thing is how and if IRS can handle or enforce the law.

At a recent seminar it was pointed out that we should apply for a FEIN for all rental property owners unless we/them feel comfortable having the landlords SS no. floating around.

Thank you very much for that info. I had prepared a letter for rental home owners and added that they may want to file the SS4. Now, I'm finished with the letters and waiting until after the Christmas card rush to send them out.

[Gretel]

Has the government given us a "tool" to verfiy the Name and ID's ?? Probably not, and then we will receive another CP #### stating that the information on the 1099 forms is incorrect - maybe in 18 months after the fact

What a mess this is going to be ( I am thinking)
Sandy

Oh yes, since a number of years you can sign up for ITIN matching with your E-Services. Have used it frequently, not very recently though, and it works very well.

[kpangelinan]

I'm one of the few also....

I'm one of the few that agree with you. I don't think that this will overburden the rental owners and I think this will hit the "underground economy". Not only is there a loss of income tax revenue but they're hard to compete with too, when you can find any handyman to put a roof on your rental for $10/hour and the legit roofing contractor is paying more than $10 in liability and work comp insurance alone.JMO

I'm with you two on this also....I even have rental properties myself and will enjoy processing these for my clients.

[kpangelinan]

Same for me...

Legit contractors/handymen/etc will comply. The nonreporters will either start losing work or have to cut rates way down to compete. Landlord wins.

I'm a landlord and have been for years. And yeah, I wouldn't bet a penny that all of the workers I've hired over the years reported all their earnings. Or maybe any of their earnings...well except one whose taxes I did. And he issued 1099s to anyone he hired to help on jobs.

Same here.....most if not all (except for the ones I did taxes for as well) did not report the payments I made to them.

[ttbtaxes]

Completing the SS-4

I will be advising rental property owners to file for an EIN so that when they prepare and send out 1099s they will not have to use their social security number(s) on the 1099s.

Two questions about preparing the SS-4:

1) A single individual owns the rental property. Which box do you check on Line 9a? This is not a sole proprietor.

2) Husband and wife own the rental property. Which box do you check on Line 9a. They are not a partnership unless you've been filing 1065s every year.

[Kram BergGold]

Don't think homeowners applies

The wording is for services. A payment to Allstate for insurance is not a service.