Expenses paid by tenant. If your tenant pays any of your expenses, the payments are rental income. You must include them in your income. You can deduct the expenses if they are deductible rental expenses. See Rental Expenses, later, for more information.
Uncollected rent. If you are a cash basis taxpayer, you do not report uncollected rent. Because you do not include it in your income, you cannot deduct it.
Actually, I don't think it's self-employment income. If it were periodic, then maybe. Therefore only report it on line 21 Other Income. There is no social security tax, but there will be federal tax. I hope you don't have an estimated tax penalty.
Not sure if what you say is right. Say your annual rent is 12k. His rental income would be 12k. Then say he made the improvement of 6k, so he would depreciate over a period of years, say for example 1k a year. So net income first year is 12-1k.
But if you fixed the item, then he reports rent income as 6k plus the expenses paid by tenant of 6k. So net rental income is still 12k. And first year depreciation is 1k. So taxes for the landlord are the same.
Say you're in the 25% tax bracket. In the first case your net tax is T and savings as the end of the year is S. In the second case, you pay 0.25*600000, but then again you saved 6k on rent payments so your savings are 4500 and the governments take is 1500. By giving you a 1099-MISC for 6k, it seems the landlord invented 6k out of thin air, like a printing press.
Similar thing happens when companies issue stock, which I don't quite understand. If they issue 10000 new shares and market price is $10 a share, then it's as if they printed 100,000 out of thin air. But isn't the government the only one able to print money?
Yes to the paragraph above.