New IRS 1099 Requirements for Landlords - PowerTeamHomes.com

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NAR opposed this new law and is continuing efforts along with others in trying to get the new law repealed or modified.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.

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VESTING - Who is in Title to the Property? -PowerTeamHomes.com

•Vesting is determined by the last deed of record
• Many different forms of ownership
• The agent needs to make sure that the listing is signed off by the actual owners of the property

o Single: A sole person owning the property.
Watch out for Homestead!

o Tenants in Commons: undivided interest in the property by 2 or more people.
Can be equal or unequal shares of the property
No right of survivorship
Creditors can attach a claim against the entire property

o Joint Tenancy: undivided interest in the property by 2 or more people
Equal shares of the property
Right of survivorship
Creditors can attach a claim against the entire property

o Tenants By The Entirety: Husband and wife own the entire property.
Equal shares of the property
Must be their primary residence
Limited protection against credit

o Land Trust: The trustee is a bank or a trust company. The trustee executes the deeds
and mortgages upon the written direction of the beneficiary
If you sell a property where a Land Trust is in title you must have the following:
• Certified copy of the original trust agreement
• The Trust Department must execute any recordable documents

o Living Trust: The trustee is usually one of the individual owners of the property. The
living trust allows the property to pass in accordance with the trust without probate.
If you sell a property where a Living Trust is in title you must have the following:
• A properly certified copy of the original trust agreement

o Corporation
If you sell a property where a Corporation is in title you must have the following:
• Letter of Good Standing from the state: www.cyberdriveillinois.com
• Copy of the Articles of Incorporation and ByLaws
• Resolution Authorizing Sale

o LLC: Limited Liability Corporation
If you sell a property where a LLC is in title you must have the following:
• Letter of Good Standing from the State
• Copy of the Articles of Organization
• Copy of the Operating Agreement

o Partnership
If you sell a property where a Partnership is in title you must have the following
• Copy of the Partnership Agreement
• Affidavit/Certificate that the Agreement has not been further Amended