1099-Misc for Labor improvements done to rental property

Forum|Forum|6 years ago
September 2, 2019
2 replies
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Hello. I have a rental property and after my last tenant moved out, I had to do different repairs and improvements. For this, I purchased the parts from store and did some work myself while hiring some help for portions as well. The cost of labor surpassed the $600 and I never sent a 1099-Misc to the laborers I utilized to help me. Can someone please help me figure out how I need to resolve this as I am trying to complete my taxes for 2018 and trying to figure out what to specify when TurboTax asks me if I paid anyone $600 or more for work related to the property. Do I just select the statement that says Yes, I paid for work required a form 1099 and then answer the sub statement that says No, I did not issue 1099?

Thanks in advance for your assistance!

pk12_2

Employee

IRS official position would be for you to issue the 1099-MISC -- with copy to the IRS. It has no effect on your return or filing thereof. However, if the worker employed by you did provide you with his/her SSN and you are providing 1099-MISC late, his/her return may have to be amended ( depending on whether he/she declared that income or not). This may or may not make the worker happy

On the other hand , if you tell TurboTax that either (a) I was not required to issue 1099-misc or (b) I have issued the 1009-misc -- perhaps it would be too far a stretch of the actual situation.

Neither is an easy choice

smarttees

difference is if your rental is a trade or business or a passive activity because you're an investor......it's easier now because there is the qbi deduction and if your rental is not a trade or business you don't have to issue any 1099s but then you can't take the qbi deduction.

ShujaAuthor

my rental was the house i grew up in and then when the family moved on, i rented it for a while because market was really bad in the city and i would have to have sold it at a loss. this is the only property i have and is not registered under an LLC.

Carl11_2

Employee

I have three rentals myself and pay a guy well over $600 for yard care and other help turning the property around when I have a property vacant between renters. I've never issued them a 1099-MISC and always select "no" for the 1099-MISC. It's never been a problem.

Now a number of years back congress passed a law that, in the way it was worded I was "required" to issue the 1099-MISC. But that same year congress revised the wording so that it didn't apply to rental property owners if rental income was not your primary business and primary source of income. So if you are not a real estate professional, just select no and press on.

RockEnt

I am in the same boat as you are with three rental properties and never gave a 1099-misc even though I have paid way over $600 for repairs. Didn't even know I was to include the cost of materials! Well, what's done is done, it's too late to go back. I will be moving forward and doing for the coming year.