MORE INcorrect information on WHO and HOW to REPORT 1099-MISC for Rental Income

By
Property Manager with Gibson Management Group, Ltd.
https://activerain.com/droplet/RyX

My rental property management agency failed to send me a 1099-MISC (and is refusing to send one). How do I report my rental property income or report my agency's failure to send a 1099?

Their accountant says they don't need to send a 1099-MISC to me (they have sent it to vendors for work). Every forum I've looked at said that property management agencies should send the property owner a 1099-MISC to report their income from the rental.

The above question is from the INTUIT (Quicken) website and so far, all of the answers to the question are INcorrect or INcomplete.

YES - the property manager needs to provide a 1099-MISC for owners who are NOT a corporation and who have RECEIVED over $600 in income.

HOWEVER, the property owner can ALWAYS report the income on their Schedule E and if the property manager does not provide the proper reporting to the IRS, then the IRS will look to the property manager for their failure to report income.

NOT receiving the 1099-MISC does not mean that the landlord does not have income and they do need to file on the income they received for 2012.

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Rainmaker
1,240,346
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

There is so much MISinformation about this issue because of the Obamacare scare of several years ago and many do not realize that the IRS-1099 reporting is NOT a part of that legislation and it has been around for over a decade......I know - I was there!  Sometimes it PAYS to be OLD

Mar 04, 2013 08:40 PM #2
Rainmaker
1,383,927
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Wallace, thanks for clarifying this. You're right, there is a lot of mis-information out there.

Mar 04, 2013 09:37 PM #3
Rainmaker
535,399
Kenneth Cole
Weichert Realtors Appleseed Group, 2043 Richmond Ave. S.I.N.Y. 10314. office phone 718-698-9797, Appleseedhomes.com... - Staten Island, NY
NYS Licensed Real Estate Salesperson

That's why I have a CPA.

Mar 04, 2013 09:37 PM #4
Rainmaker
2,484,023
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I knew a fellow who failed to report and when he got audited, well IRS made up for his "oversights" charging interest and penalties

Mar 04, 2013 10:17 PM #5
Rainmaker
1,240,346
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

Kenneth - I've had owners tell me that their CPA told them they no longer need 1099s because Obamacare requirement has been eliminated...the long-standing IRS requirement has NOT been eliminated.

Mar 04, 2013 10:17 PM #6
Rainmaker
1,304,524
Charles Stallions Property Manager
Charles Stallions Real Estate Services - Pace, FL
Pensacola, Pace & Gulf Breeze Property Management

Good morning Wallace and as always you are on top of things, I cannot imagine what a PMC would not send a 1099 oh well. I had a landlord ask today if we can withhold income tax due to her rental is effecting her refund check at the end of the year.

She says why have an investment property if it reduces my refund check

Mar 04, 2013 10:58 PM #7
Rainmaker
1,240,346
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

....then she needs to UP her payroll withholding exemptions....many DIY landlords and property managers don't understand what the EXEMPTIONS from their withholding actually MEAN

Mar 04, 2013 11:01 PM #8
Rainer
380,451
Edward Gilmartin
CRE - Boston, MA

I know a lot of landlords who self manage and under report their rent received every year....the IRS really can not catch them either...it is a problem.

Mar 04, 2013 11:40 PM #9
Rainmaker
2,598,557
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

This is excellent information for those with rental property.  I owned rentals in the past, but I self-managed, and reported it to the IRS via the appropriate schedule.  I would think that property management firms should provide the 1099 you are looking for.

Mar 05, 2013 12:50 AM #10
Rainmaker
1,240,346
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

1099 reporting is very specific - who gets and who reports....I have had owners threaten to provide me with 1099 and I indicate I am DOUBLY exempt - real estate brokers AND corporations don't get them.

 

Mar 05, 2013 01:05 AM #11
Rainmaker
3,209,711
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Thankfully I have a husband and a CPA who do all of the legwork to gather everything that's needed. If I had to do it myself, I'd go stark raving mad!

Mar 05, 2013 03:08 AM #12
Ambassador
1,241,523
Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

Thanks for answering the question. I did not know this as our office does do not do property management. 

Mar 05, 2013 03:11 AM #13
Rainmaker
636,285
Scott Fogleman
New Home Team 804-573-9592 - Richmond, VA
New Home Team

Wallace- What kind of company doesnt sendout 1099's.. Oh, I know, one that doesnt want to be around

Mar 05, 2013 05:23 AM #14
Rainmaker
1,240,346
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

The IRS will educate them if they are not sending them out....costly and totally unnecessary - my property management software does EASILY

Mar 05, 2013 07:48 AM #15
Rainmaker
1,317,601
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Glad that you were able to clarify how to handle this type of issue.  I am sure it will be helpful to those who have the same question.  I hope you send this on to quicken.

Mar 05, 2013 12:05 PM #16
Rainmaker
1,570,633
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Wallace, I fired my account of 30 years this past October.  One of the reasons is because he wasn't filing the 1099 - MISC on our rentals.  He had an explanation that was lame.  There were other issues, but that one was the final straw. 

Mar 05, 2013 12:26 PM #17
Rainer
366,437
John Michailidis
Real Property Management of Sarasota & Manatee - Sarasota, FL
Real Property Management of Sarasota & M

I enjoyed reading your post and I appreciate your expertise -- thanks for sharing!

Mar 05, 2013 12:29 PM #18
Rainmaker
1,240,346
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

Mike * should have called me - been there, done that, read the IRS regulations.  Having a great property management software * PROMAS * with good electronic newsletters really helps.

Mar 05, 2013 06:51 PM #19
Rainer
28,347
Kathleen "Kathy" Price
Berkshire Hathaway Home Services, Fox & Roach, Realtors - Millville, NJ
CRS, Broker Associate, Southern NJ

I can't imagine that they wouldn't send a 1099 when they are managing the rental.  I believe that would come under the job description of "manage".  I get a 1099 from the state every year for my section 8 rental. Why does the management company think that they are any different?  It doesn't make any sense.

Mar 05, 2013 08:41 PM #20
Rainmaker
1,240,346
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

Confusion is with the repeal of the 1099 reporting requirement that was ELIMINATED last year from Obamacare....NEWBIES to the biz may think they do not have to report and CPAs are not exempt from this MISconception

Mar 05, 2013 08:49 PM #21
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