Wednesday, December 22, 2010

Revised IRS 1099 Requirements for Landlords

NOTE: This is a revised version of a previous eNews bearing the same title.
Please disregard the previous version, as this one includes updated information.

December 22, 2010

New IRS 1099 Requirements for Landlords

Click here for a short NAR podcast containing further details regarding the change. Starting in 2011, there is a new tax requirement for landlords. All landlords who receive $600 or more in rent for the year must send a 1099 to all service providers that the landlord paid $600 or more during the year, such as plumbers, carpenters, yard services or repair people.

The new requirement applies to owners of both residential and commercial property. Prior to 2011, this requirement had only applied to those involved in full-time property management, but now the requirement covers all types of landlords.

Landlords will need to gather federal tax ID numbers from service providers in order to file the 1099s. Failure to file the 1099s with the IRS can result in fines of $50per 1099 not filed. In 2012, these requirements will expand to cover providers of goods to landlords.

NAR actively opposed this change in the law and is working with others to have this requirement repealed or otherwise modified. Congress took this action in order to assure that income paid to contractors can be verified through a Section 1099. To read more about the history of the law as well as the actions NAR has taken to oppose this change in the law, click here:

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