Have a Tax Question? Ask a Tax Expert
Hi and welcome to Just Answer!
What should I list on the 1099 Box 1 I give to my client?
Yes - if paid more than $600 per year.
How about for my own tax return? Is $1,000 my income or is $100 my income? Although necessary, the tenant sends me a 1099 which reports $1,000 income to me. The IRS should expect to see that I have $1,000 in income.
I suggest to report $1000 as your income and report all payments you made as deductions - that will be clear with IRS and will correctly represent your net taxable income.
Let me know if you need any help.
Thank you for using Just Answer.
The 1099s that you give to your client, the property owner, should have the gross rents received in box one. In addition, I have always made it a habit to give the property owner a summarized breakdown of all their income/expenses for the year to assist them in their income tax reporting.
I would suggest as well to report the total rents that you have received in as income, then report the expenses that you have paid out to everyone including your tenants. You will only be taxed on your commissions at the end but will report everything in and out.
If you need more clarification, please let me know. If I am not available at the time, I will be. I appreciate the opportunity to assist you and I look forward to your response.Stephanie
I do see the dilemma. However, in reading this letter ruling, it looks as though the rental funds are put into an account that is not controlled by the property manager. So, it doesn't look as though this is running through the property manager's accounts.