1099-NEC and 1099-Misc

[judsonm]

I have a client that purchased a property in a single member LLC (disregarded entity) and rents the building to his other buisiness which is a sole proprietorship (Also has a an EIN due to former employees). He had to obtain an EIN for banking purposes for the LLC. He had a contractor do some work for the LLC and needs to furnish a 1099-NEC to the contractor. 1) As the payor/issuer of the 1099 does he use his social security number or the LLC's EIN. 2) As a sole proprietor renting the building from the LLC/disregarded entity should the sole proprietor issue a 1099-Misc for rents to the LLC and does the sole proprietor as payor/issuer use its social security number or EIN as the Payoron the 1099. Any help would be appreciated.

[Maribeth]

In our office, we would use the EIN. All of our sole proprietors have EIN's. With employees or without employees. For banking purposes and for reporting purposes. .

[TaxGuyBill]

a single member LLC (disregarded entity) ... He had to obtain an EIN for banking purposes for the LLC

The LLC's EIN is ONLY used for employment and excise taxes. For income taxes, you use the owner's ID number (either the SSN or an EIN in their personal name).

[Anarchrist]

Off the top of my head, the instructions state to use the EIN as TaxGuy has stated. I ignore that and use the EIN. People get the EINs so they aren't giving out their social security number. Does your client want his social security number given to a bunch of contractors he barely knows? I doubt it. Use the EIN, the irs will never complain about it.

[TaxGuyBill]

People get the EINs so they aren't giving out their social security number. Does your client want his social security number given to a bunch of contractors he barely knows? I doubt it. Use the EIN, the irs will never complain about it.

That is why they should use an EIN in their personal name. As you pointed out, the Instructions are quite clear that the individual's name and ID number should be used, not the LLC.

[judsonm]

I really appreciate the input. Thany you all for your help.

[Gretel]

That is why they should use an EIN in their personal name. As you pointed out, the Instructions are quite clear that the individual's name and ID number should be used, not the LLC.

Yes, I agree, the instructions are very clear. However, I do not follow these instructions if I have an EIN for payor or payee. I did, times and again, agonize over this subject though. I only make sure that I use the sole proprietor name if I only have a SS. I have a client whose one SMLLC loaned another SMLLC funds. For the 1099-INT reporting I most surely use the EIN's and not his SS in both fields. I am doing this since over 15 years and never heard back from the IRS.

[TAX4US]

Do we have to print these on the red ink forms that go to the IRS?. I am not efiling these.

[Gretel]

Yes, red forms needed.