New 1099 Reporting for owners of Rental prop

[erchess]

If I am not very much mistaken the requirement that the owner provide a 1099 to everyone they paid over $600 does not apply to payments made by credit card or check. Is that correct?

Also my one affected client is paying her parents on an installment agreement for all of the property being rented out. Does she need to start giving her parents some kind of statement? If so, am I right in thinking it would be a 1098 not a 1099? I do the parents' return and hers so it isn't a major big deal but I won't do it unless I know they need it done.

[S T]

As far as I know

If rental property owner pays any vendor by any method, cash, check or credit card, then the rental property owner will need to issue a 1099 MISC form for amounts per vendor of $600 or more, applies to transactions after 12/31/10 - unless this is repealed. First year to report would for 2011 transactions issued 1099 forms reporting 2012.

Sandy

[solomon]

If paid by credit card, the 1099-MISC is not required. As I recall, this is covered under the regulations in either §1.6050W-1 or 1.6050W-2.

[ttbtaxes]

Take a look at Reg. 1.6041-1(a)(1)(v) Example 1. It clearly exempts credit card payments from the 1099 filing requirement.

[S T]

Hmm

So if a rental property owner pays all Vendors (Repair People) i.e. "Earls the plumber" by credit card we DO NOT have to include for 1099 MISC reporting? Do we only have to report cash pays, what about check payments?

If this is so, I will have all of my property owners convert to Credit Card Payments

Sandy

[ttbtaxes]

You include all payments other than those paid by credit card.

[Gretel]

Here is my understanding of current 1099 reporting:

Nothing changed for 1099 reporting for businesses, meaning basically all payment of $600/year or more to non-corporations for services need to be reported.

Since nothing changed, also credit card payments are included in total payments. Unless they never needed to be reported and I missed this or this is the only piece that changed.

Rental property owners now (2011) also have to report payments for services, same as businesses.

2012 nightmare has been repealed.

Am I on track?

[veritas]

I believe the credit card

aspect comes in to play in 2012. Payments by a landlord for services and products to all but tax exempt entities would be required to be reported for amounts of $600 or more unless paid by credit card.

So for 2011 landlords would report payments of $600 or more for services regardless of the payment method.

[ttbtaxes]

2011

Reg 1.6041-(1)(a)(1)(iv) specifically addresses this issue and it is for years beginning after December 31, 2010. Therefore, these rules are now in effect.

[veritas]

After further

Reg 1.6041-(1)(1)(iv) specifically addresses this issue and it is for years beginning after December 31, 2010. Therefore, these rules are now in effect.

reading I see you are correct.

Notice 2010-51

[joanmcq]

The landlord requirement is exactly the same as the one currently on the books for businesses. Services over $600, regardless of the method of payment, require a 1099, unless the provider is a corp.

[S T]

Confusion

I like Joan believed the Landlord requirement to issue 1099 Misc, is for all payments to Service Providers as in Gardeners, Repair People, etc - whether it be a payment by cash, check or credit card. Except if a Corporation

So now I am really confused - on the requirements for 2011 payments that Landlords or Rental Property Owners have to follow.

Sandy

[veritas]

I thought so too

I like Joan believed the Landlord requirement to issue 1099 Misc, is for all payments to Service Providers as in Gardeners, Repair People, etc - whether it be a payment by cash, check or credit card. Except if a Corporation

So now I am really confused - on the requirements for 2011 payments that Landlords or Rental Property Owners have to follow.

Sandy

but since credit card processors will start reporting 2011 transactions on form 1099-K there would be double reporting.

[ttbtaxes]

I like Joan believed the Landlord requirement to issue 1099 Misc, is for all payments to Service Providers as in Gardeners, Repair People, etc - whether it be a payment by cash, check or credit card. Except if a Corporation

So now I am really confused - on the requirements for 2011 payments that Landlords or Rental Property Owners have to follow.

Sandy

Veritas is correct. Rental property owners are now required to issue a 1099 to non-corporate service providers for all payments made during 2011 except those payments made by credit card. Payment for goods are exempt in 2011.

[S T]

Payment for Goods

Wouldn't payment for goods be Home Depot, Lowes and Supply Houses?

I am only asking about payments to an actual Service Provider such as in Plumber, HVAC, Carpenter, Handyman.

I thought the Credit Card reporting was going to be repealed, (1099 K) well maybe it hasn't passed yet. This is just one of the many confusions that is going to take place with this whole 1099 MISC issue starting with year 2011 reporting in 2012

Grrrr!!!!!!!

Sandy