I have a new client with several rental single family houses. They have a couple of people they paid 600 dollars or more too. Am I correct that they should have issued a 1099misc to them or is that not necessary. I thought I read somewhere that maybe not. Any thoughts on this.
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Maybe, here are the IRS instruction for 1099s https://www.irs.gov/pub/irs-pdf/i1099msc.pdf -
Issuing 1099-MISCs is necessary if the rental activity rises to the level of a "Trade or Business" (assuming payments of over $600 to a non-corporation).
If it does not rise to the level of a "Trade or Business", it is not necessary to issue 1099-MISCs.
You said the client has "several" rentals, which makes it more likely it may be a "Trade or Business".
Another thing to consider is QBI (the 20% deduction for ยง199A). If you are claiming the rental for QBI purposes, you are stating it *IS* a "Trade or Business" (which would require 1099-MISCs, when appropriate).Comment
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