Business or not?

[Unregistered]

If a landlord hired an independent contractor (sole proprietor) to do a repair job and paid him more than $600, is he required to give him a Form 1099-misc at the end of the year?

I heard you are required to give Form 1099-misc only if you are a business. So is a rental activity considered a business?

Thank you.

[Uncle Sam]

Business or Not?

Yes it is.
And yes, in order for the rental activity to claim the deduction, a 1099-MISC should be issued if it exceeds the $ 600 amount per year.
While the rental activity is not a "trade" in the sense that it's a commercial business establishment, it's still owned by a party whose intent is to make a profit from the leasing of space.

[sea-tax]

Yes it is.
And yes, in order for the rental activity to claim the deduction, a 1099-MISC should be issued if it exceeds the $ 600 amount per year.
While the rental activity is not a "trade" in the sense that it's a commercial business establishment, it's still owned by a party whose intent is to make a profit from the leasing of space.

Would not a receipt work just as well. I mean I spend more than 600 on my tax software but I don't send Lacerte a 1099. It is not the Landlords problem whether the contractor reports the income or not. Maybe I missed something , but.........

[DTS]

1099

Sea-tax,

In an audit of one of my clients, the gal only allowed the $600 of $3,600 claimed due to no 1099-Misc.

Dennis

[farm girl]

If I remember correctly,

the 1099 Misc instructions state that you need to provide the 1099 to a person who provided a service to you, in the course of your business, that you paid $600 or more in the calendar year. Does not include corporations that provide a service.

[JG EA]

My opinion is

that rental activity is NOT a business required to send a 1099. Individual investors have rental property.

Instructions for 1099 Misc:
"Trade or business reporting only. Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit...."

Although talking about non profits the following is from http://www.irs.gov/charities/article...158841,00.html

"Trade or Business" Defined

"The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services...."

[Unregistered]

Taxpayer uses office in home, has $ 5000.00 in repairs to personal
residence, does 1099 Misc need to be issued to contractor?

[DTS]

1099-Misc

I would issue the 1099-Misc to this contractor, wouldn't you?

Dennis

[Bill Tubbs]

Oih

Taxpayer uses office in home, has $ 5000.00 in repairs to personal
residence, does 1099 Misc need to be issued to contractor?

If the repairs were just to personal areas of the residence, I would say not.

Let's say it was a roofing job, and the OIH was 20% of the home, then $1000 of the repairs would be attributable to the business -- would a 1099-Misc be required then?

If the business was renting the office space, then the landlord pays for the repairs, the landlord would then have the question of sending the 1099-Misc, and not the business renting the space. Would similar logic hold with a Sole Proprietor with OIH? That the repairs are being made to the home, of which the individual (not the business) is the owner, which would mean the 1099-Misc responsibility (if any) would be on the owner and not the business. But, of course, an individual home-owner is not required to issue a 1099-Misc. This all is presuming that the home-owner (not the business) paid for the work to be done.

Bill

[Unregistered]

Sea-tax,

In an audit of one of my clients, the gal only allowed the $600 of $3,600 claimed due to no 1099-Misc.

Dennis

\

And you let her get away with it? There is a penalty for not filing 1099's, not the disallowance of a bonafide business expense.

[Unregistered]

bingo

Tell her you will apy the $50 penalty-failure to file the 1099...........