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WebCPA, Tax Accountant
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Experience:  Licensed CPA. 10+ years experience.
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im a rental property owner. and i am hiring a general contractor

Resolved Question:

im a rental property owner. and i am hiring a general contractor to remodel and repair a property. do i need a w9 from him even though i am writing checks to his business name and i have invoices and estimates with his business information.

if he refuses to to give me a w9 can i still deduct my repair costs without the w9 and still 1099 at the end of the year
Submitted: 2 years ago.
Category: Tax
Expert:  WebCPA replied 2 years ago.

Welcome and thank you for your question. I'll do my best to provide an informative answer. Please let me know if you need any clarification.

 

If the contractor is a corporation (i.e. XYZ, Inc., or XYZ Corp., etc.) then no, you do not need to issue a 1099 and the W-9 would not be necessary. And yes, you can still deduct the repair costs for the rental property. Just keep all of the invoices and/or receipts to support your deduction.

 

Per the 1099 instructions, there are a few circumstances that would require a 1099 for a corporation. They are as follows:

 

Reportable payments to corporations. The following payments made to corporations generally must be reported on Form 1099-MISC.

Medical and health care payments reported in box 6.
Fish purchases for cash reported in box 7.

Attorneys' fees reported in box 7.

Gross proceeds paid to an attorney reported in box 14.

Substitute payments in lieu of dividends or tax-exempt interest reported in box 8.

Payments by a federal executive agency for services (vendors) reported in box 7.

 

Here is a link to the instructions for your reference:

http://www.irs.gov/instructions/i1099msc/ar02.html

 

I hope this helps and please let me know if you need further assistance.

Customer: replied 2 years ago.

the contractor is a sole proprieter and he stated to me that he does not need to fill out a w9 since he states that the 1099 requirement for landlords was repealed.


 


i still write checks to his business name and all his invoices and estimates have his company info. also i have already checked his contractor license and general liability insurance and it all checks out.


 


my main concern is that i still deduct the expenses for the repairs. as i have had this contractor work on my own personal with no issues and performed great work.


 


thanks so much


 


 

Expert:  WebCPA replied 2 years ago.
Greetings,The 1099 instructions refer to payments made in a trade or business, which would not apply to rental property owners (passive activity) unless clearly a dealer in real estate or engaged in the active rental of properties as a trade. The healthcare act did expand the 1099 reporting to all landlords but it was later repealed. Therefore, you would not be required to issue a 1099.Kind regards
WebCPA, Tax Accountant
Category: Tax
Satisfied Customers: 110
Experience: Licensed CPA. 10+ years experience.
WebCPA and 3 other Tax Specialists are ready to help you

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