Effect of new 1099-MISC issuance law on individual landlords?

I believe that she should have been doing that all along. After all, the rental is considered a trade or business and amounts paid in the course of a trade or business are to be reported (assuming all the usual assumptions of course).

Gene E. Utterback, EA, RFC, ABA

"Rich Carreiro" wrote

Should have all along for any individuals and partnerships, but in 2012 (if it sticks) they'll have to issue Forms 1099 for all payments greater than $600 annually to corporations as well. So that may even include the mortgage interest from how I read it.

| Should have all along for any individuals and partnerships, but in 2012 (if | it sticks) they'll have to issue Forms 1099 for all payments greater than | $600 annually to corporations as well. So that may even include the | mortgage interest from how I read it.

I'll have to start sending a 1099 to Verizon? That's going to be interesting...

Did I also understand correctly that payment for goods will be included? That might be useful since (I assume) they will have to add a box for it. Companies that previously felt they had to report such always seemed to use the Nonemployee Compensation box which could cause problems.

Dan Lanciani ddl@danlan.*com

I wasn't aware of this change. Where can I find more details about it?

Bob Sandler

"Dan Lanciani" wrote

That's how I read it.

I think it'll all be lumped into one amount. For providers that supply both goods and services, the Form 1099 amount would be inclusive of the whole amount billed.

You didn't have to 1099 someone if you bought a tangible good though, like if I were to buy a desk from Joe the businessman, or inventory for resale, etc.

The interesting thing that might come up is on expense reimbursements. While a single sale person might not rack up $600 to one provider, the company, through several sales persons might well exceed that $600 amount over the course of a year. Gathering the data from a sales rep is going to be interesting.

And I'm assuming that the requirement to issue a 1099 is exclusive of how the amount gets paid, so that I wouldn't issue a 1099 to Visa (except if I exceeded $600 in interest paid), I would be responsible for issuing 1099's to every business I purchase from and pay with Visa if that amount exceeds $600.

It's going to make forms providers and printers very rich.

Ah, the winds they are a changin'.

"Bob Sandler" wrote

It's part of the health care law.

See section 9006 of HR 3590.

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

(a) IN GENERAL.?Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections:

??(h) APPLICATION TO CORPORATIONS.?Notwithstanding any regulation prescribed by the Secretary before the date of the enactment of this subsection, for purposes of this section the term ?person? includes any corporation that is not an organization exempt from tax under section 501(a). ??(i) REGULATIONS.?The Secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.??.

(b) PAYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS.? Subsection (a) of section 6041 of the Internal Revenue Code of

(c) EFFECTIVE DATE.?The amendments made by this section shall apply to payments made after December 31, 2011

At

Funny how the HEALTH CARE LAW is making ME SICK!

Gene E. Utterback, EA, RFC, ABA

In article , snipped-for-privacy@bellsouth.net (paulthomascpa) writes: | | "Dan Lanciani" wrote | > Did I also understand correctly that payment for goods will be included? | | That's how I read it. | | | > That might be useful since (I assume) they will have to add a box for it. | > Companies that previously felt they had to report such always seemed to | > use the Nonemployee Compensation box which could cause problems. | >

| | I think it'll all be lumped into one amount. For providers that supply both | goods and services, the Form 1099 amount would be inclusive of the whole | amount billed.

I think that's how it already works when goods are provided in conjunction with (obviously related I guess) services.

| You didn't have to 1099 someone if you bought a tangible good though, like | if I were to buy a desk from Joe the businessman, or inventory for resale, | etc.

Right, this has caused problems for me. Companies think there must be some place to report it so they report it as Nonemployee Compensation. Then the state where the company resides wonders why I'm working there and not filing a state tax return. I'm hoping for a different box when there is a pure sale.

Dan Lanciani ddl@danlan.*com

"Gene E. Utterback, EA, RFC, ABA" wrote

Look at the positive side.

Ok, so there isn't a positive side, but.....

Look at the additional workload (additional billings) for you in preparing

I mean, how cool is this that you get to bill the client for you preparing the 1099 they have to give to you for preparing the 1099 they have to give to you.

It's mind boggling how professional politicians think.

I don't believe this is the case for rental real estate. I have never read about or heard of a landlord issuing 1099's to contractors and what-not. Not to say you are not correct, but I've been landlording a long time and it has never come up.

However, there is another bill winding its way through Congress right now - The Small Business and Infrastructure Jobs Tax Act of 2010. This has an explicit provision that alters current law to now treat individuals renting real estate to be considered a trade or business for reporting purposes:

"SEC. 304. INFORMATION REPORTING FOR RENTAL PROPERTY EXPENSE PAYMENTS.

(a) In General- Section 6041 is amended by adding at the end the following new subsection:

`(h) Treatment of Rental Property Expense Payments-

`(1) IN GENERAL- For purposes of subsection (a), a person receiving rental income from real estate (other than a qualified residence) shall be considered to be engaged in a trade or business of renting property."

Here's a link about the bill:

I can think of at least 20 1099's I will have to issue off the top of my head. Might be 30 or more by the time I add everything up.

I sure hope this doesn't pass.