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January 7, 2023
Question

I have a vacation home that I rent through a property company. I had the unit painted and want to know if I need to send a 1099 to the painter.

  • January 7, 2023
  • 2 replies
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    2 replies

    DoninGA
    Employee
    January 7, 2023

    As a landlord of a rental property you are not required to furnish a Form 1099-NEC to an independent contractor who performed a service on the property.

    January 7, 2023

    A 1099 would be required if the rental rises to the level of a "trade or business".

    Unfortunately, there is no clear-cut answer to when a rental rises to the level of a "trade or business".

     

    If the tenants are provided "services" (such as maid service or meals), it would be a "trade or business".

    If the tenants are long-term (over 30 days) and you only have a single rental, most tax professionals view it as NOT a "trade or business".


    If it is something between there, it depends on the facts-and-circumstances.  But I suspect that if it is only one property (even if it is short term rentals), it would not rise to the level of a "trade or business" unless "services" are provided (in which case, as Don said, no 1099 would be required).

    A couple of things to consider:  (1) Are you claim the Qualifying Business Income Deduction (QBI)?  If so, you might be claiming it is a "trade or business".  (2) There isn't any harm in issuing a 1099, even if it isn't required.  So if it is a "gray area", some people choose to file it to be on the 'safe side'.