1099-Misc question when Sch E is split in half.

[nwtaxlady]

My client and his father own multiple rentals together. I always prepare my clients return first with the whole number and have the program split it 50%. Then I give my client an extra copy of the Sch E's to take to his dad.

They had re-roofed some properties and had paid 2 guys to help and I told him about issuing a 1099-misc to each guy. So my question is, does my client issue the 1099-misc to each guy and amounts split like everything else on the Sch E. Or does my client issue 1099-misc for only 1/2 of the amount to each guy and the father then has to issue another 1099-misc to each guy? The total amounts are $1820 for one and $3840 for the other.

[Roland Slugg]

I would issue just one 1099-MISC to each payee. Under "payor's name" I'd use one of the co-owners' names and his SSN, or I might list both names ... i.e. the son's and the father's ... with the SSN matching the name listed first.

On the two Schedule Es, the question "Did you file all 1099s?" can be answered yes for both co-owners ... well, assuming that all required 1099s were, in fact, prepared and filed.

[spanel]

My client and his father own multiple rentals together. I always prepare my clients return first with the whole number and have the program split it 50%. Then I give my client an extra copy of the Sch E's to take to his dad.

They had re-roofed some properties and had paid 2 guys to help and I told him about issuing a 1099-misc to each guy. So my question is, does my client issue the 1099-misc to each guy and amounts split like everything else on the Sch E. Or does my client issue 1099-misc for only 1/2 of the amount to each guy and the father then has to issue another 1099-misc to each guy? The total amounts are $1820 for one and $3840 for the other.

Can I ask why their is no partership EIN and a 1065 being filed? Use that EIN for 1099's?

Chris

[nwtaxlady]

that's the way its been done when came to me

When client came to me, that's the way the prior CPA has been doing it since 1985. So I continued to do it that way.

[spanel]

When client came to me, that's the way the prior CPA has been doing it since 1985. So I continued to do it that way.

Well that's the answer. EIN for partnership, file a 1065, use that EIN on 1099's.

Chris

[nwtaxlady]

There is no EIN

Spanel (Chris), I think you miss understood. There is NO EIN number and no formal partnership formed.

[spanel]

Spanel (Chris), I think you miss understood. There is NO EIN number and no formal partnership formed.

Correct, but you do have a partnership between 2 parties regardless of paperwork or what the person did before you. You should really apply for an EIN and file a 1065. My opinion is that their returns have been filed wrong for years and just because the person before did it that way is no excuse to keep doing it wrong.

Chris

[New York Enrolled Agent]

Correct, but you do have a partnership between 2 parties regardless of paperwork or what the person did before you. You should really apply for an EIN and file a 1065. My opinion is that their returns have been filed wrong for years and just because the person before did it that way is no excuse to keep doing it wrong.

Chris

Mere co-ownership of property which is used as a rental is not necesarily a partnership. Look at the Form 1065 instructions where the definitions are contained.

[Kram BergGold]

1099 not required

Filers of Schedule E are not required to file 1099 Forms, so why bother? They said do them. People went nuts and they said don't do them. why they have left those silly questions on the Schedule E is a mystery to me. I answer every one, not required to file 1099.
I see no problem filing the 2 Schedule E Forms.

[taxea]

I agree that co-ownership of a rental does not require a partnership return. I also agree that Sch E rentals do not require 1099's being issued. The question is on the form because they were going to be required but aren't yet. I have rentals and I do issue 1099's for any service or repair just to insure that the income to the worker is reported.

[S T]

I have several clients that are co-owners of rental property. My software allows me to assign the percentage, i.e. 50/50 30/70 etc, and the resulting Schedule E will indicate as such for income and expenses.

Agree with other posters, not necessary to file any 1099Misc forms to contractors for Schedule E Rentals.

I believe I have only 1 - Form 1065 which is reported via 8825 - however, that is only due to the fact that the husband and wife organized as a LLC for a Single Family Rental.

Sandy