My daughter runs a house sitting agency where homeowners come her to hire a house sitter. The homeowner pays the house sitter directly and the house sitter pays my daughter a percentage of the house sitting fee.
If the house sitter pays my daughter more then $600 in a year (unusual but possible), does the house sitter have to issue a 1099 to my daughter agency under either current or new (2012) 1099 rules?
Since this payment to your daughter is in connection with the housesitter's trade or business, yes, the housesitter is supposed to issue her a 1099Misc under the current rules, and the new rules would not change that.
If the daughter has arranged a corporation or LLC, then under the current rules a 1099-MISC is not required.
Yes and no.
If the daughter actually works as an employee of her corporation, and payment is made to the corporation, I would agree.
But simply forming an LLC, even if electing to be taxed as a corporation, does not currently release the payer from issuing a 1099.
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