1099 Misc for Rental Property Owners - Gross or Net

Forum|Forum|3 years ago
April 18, 2023
1 reply
0 views

I manage short term rental properties for owners on VRBO and Airbnb. When I issue them 1099s at the end of the year, should I issue the 1099 for the gross amount I was paid out before I deducted my management and cleaning fees, or do I issue them for the net amount I transferred to the owner and give them a breakdown of expenses, including management fees, for them to write off? I have always issued them for the gross amount, but I have a new client that is insisting their CPA says I should have issued the 1099 for the net amount paid.

Not A Product Question

AmyC

Employee

Gross income is required. A breakdown of expenses for them to deduct is also needed.

The About Form 1099-MISC, Miscellaneous Income states:

But the real estate agent or property manager must use Form 1099-MISC to report the rent paid over to the property owner. See Regulations section 1.6041-3(d) and Regulations section 1.6041-1(e)(5), Example 5.

The section 1.6041 states:

For these reasons, we conclude that payments under the Program will represent gross income to the landlords,

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

annetteireneAuthor

Thank you! I just reread my question and my verbiage could have been more clear. I have been issuing gross amount 1099s and giving them a year end breakdown of expenses that includes my management fees and cleaning fees. The client felt I should be issuing the net I paid out to him, not the gross. Appreciate the help.