Property Management, Tenant Selection, Real Estate News & Tips

Over-Reaching 1099 Bill For Landlords Repealed

By on December 2, 2011 in Education with 3 Comments

As you may or may not recall, depending on how close-knit you are within CPA circles, there was a significant new tax consequence and reporting requirement introduced for landlords within the Small Business Jobs Act and the healthcare reform bill passed in 2010.

This new reporting requirement was introduced to help the IRS better monitor landlord property expenses by requiring a 1099 to be filed for all independent landlords for payments during the year to any vendor or individual exceeding $600.  Examples of 1099 recipients would include: gardeners, landscapers, contractors, property managers and repair services.

Earlier this year with support from Realtors, landlords, and landlord associations such as the NARPM all contacting their representatives to object to this over-reaching reporting requirement;  both Congress and President Obama got the message and decided the filing burden was too great for smaller landlords.  The requirement for rental property owners to file 1099’s was repealed in May of 2011. The senate voted 87-12 to approve the repeal and it was signed shortly thereafter by Obama.

This is good news for landlords, your 2011 taxes just got a lot easier as you do not now have to collect tax information from your vendors, nor report it on the 1099-MISC form as proposed in the Small Business Jobs Act.

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There Are 3 Brilliant Comments

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  1. This web site truly has all of the information I needed about this subject and didn’t know who to ask.

  2. gary williams says:

    Is this still true? I have two condos I rent and this would save on paperwork.

    • The law is a little ambiguous, unfortunately. The safest thing to do is still prepare 1099s for your rental related expenses paid to vendors in amounts in excess of $600. While it’s a lot of paperwork each year, it’s far easier to prepare your 1099s each year proactively, then going back and producing receipts and evidence if you were to ever go through an audit.

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