landlords and issuing 1099's

[BulldogTom]

OK, I am confused. Can someone straighten me out?

The rules used to be that unless a rental activity rose to the level of a business, they were not required to issue 1099's for services. If they rose to the level of a business, then all the 1099 rules that applied to a business applied to them.

Then they changed it so that all rental activities were a business for the purposes of 1099 reporting, meaning issue 1099's for services in excess of $600. Not for goods. Not to corps.

Then they passed the healthcare law, and it was anyone you pay over $600 including products and corporations.

Then congress repealed part of those rules.

What is left for landlords who don't rise to the level of a business? The form Sch. E has a box at the top and asks if you are required to file 1099's? But the Spidell update book says the 1099 rules were repealed. I think Spidell is wrong, but they have been a very good source of info for us for a very long time.

Anyone have a definitive answer?

Thanks,

Tom

Lodi, CA

[jklcpa]

I was hoping for clarification too. I got an email yesterday about updating Quickbooks to help with the 1099 prep. I know that credit card processing companies will issue 1099s to merchants for sales they've processed. This QB message was to companies that need to issue 2011 1099-misc to vendors & contractors, and the need to exclude payments made to them using credit & debit cards so as to not duplicate those amounts.

I thought the new rules were repealed and we were back to the old rules, except for above.

[rfassett]

IRC-HIST, CODE-VOL, History Notes - SEC. 6041(h), [stricken.]

History Notes - SEC. 6041(h), [stricken.]

l 2011, Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (P.L. 112-9)

P.L. 112-9, §3(a):

Amended Code Sec. 6041 by striking subsection (h). Effective for payments made after 12-31-2010. Prior to being stricken, Code Sec. 6041(h) read as follows:

SEC. 6041(h) Treatment of Rental Property Expense Payments. —

6041(h)(1) In general . —Solely for purposes of subsection (a) and except as provided in paragraph (2), a person receiving rental income from real estate shall be considered to be engaged in a trade or business of renting property.

6041(h)(2) Exceptions . —Paragraph (1) shall not apply to —

6041(h)(2)(A) any individual, including any individual who is an active member of the uniformed services or an employee of the intelligence community (as defined in section 121(d)(9)©(iv)), if substantially all rental income is derived from renting the principal residence (within the meaning of section 121) of such individual on a temporary basis,

6041(h)(2)( any individual who receives rental income of not more than the minimal amount, as determined under regulations prescribed by the Secretary, and

6041(h)(2)© any other individual for whom the requirements of this section would cause hardship, as determined under regulations prescribed by the Secretary.

[Edward]

Last week received notice "Important Info Regarding Item #BOOKLETO5" concerning W-2's and 1099's:

a. The NEW requirement to issue 1099's for Rental Property Expense Payments was officially repealed by IRS.

b. Entry of Code DD in Box 12 of the W-2 for cost of employer-provided health coverage is voluntary for tax year 2011.

c. Truncation is extended for 2011 and 2012 meaning that the SSAN or EID numbers may be truncated to just the last four digits on 1099 series forms issued to taxpayers ONLY but those going to IRS must contain the "full number". This action is supposedly to combat identity theft.

.

.