Pass this on to your database: starting in 2011 there is a new tax requirement for all landlords
who receive $600 or more in rent for the year. The 1099 goes from the landlord to any service provider such as plumbers, carpenters, yard services and 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 now it covers all types of landlords.
Landlords will need to gather federal tax ID numbers from service providers in order to file the 1099’s. Failure to file the 1099’s with the IRS can result in fines of $50 per 1099 not filed with the IRS. In 2012 these requirements will expand to cover providers of goods to landlords.
NAR opposed this new law and is continuing efforts along with others in trying to get the new law repealed or modified. Congress took this action in order to assure that income paid to contractors can be verified through a section 1099.