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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
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Experience:  Extensive Experience with Tax, Financial & Estate Issues
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If I'm trustee of an inter vivos trust that owns a 3-family

Customer Question

If I'm trustee of an inter vivos trust that owns a 3-family rental property and I hire people to do work -- regular maintenance or renovation, do I have to send them 1099s?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: What else do you need to know?
JA: Is there anything else important you think the Accountant should know?
Customer: No. The workers and contractors are being paid by the rental income.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 5 months ago.
Category: Tax
Expert:  Stephen G. replied 5 months ago.

The current situation with respect to this topic is that unless a rental property activity rises to the level of a "trade or business", small landlords are not required to send 1099s to service providers.

Although there is no objective definition of what constitutes a "trade or business", it generally has to do with the level of activity, etc., in the case of rental units, a 3-family rental property would not constitute a "trade or business" (the IRS would classify this as a passive activity) while 25 such properties with a full time manager, would most likely be classified as an active "trade or business" and would require issuing 1099s to service providers.

Steve G.

Expert:  Stephen G. replied 3 months ago.

Just checking in.....In reviewing my "open" questions, I see that you have had a chance to view my response.

Even though some time has passed since then, please let me know if I can answer any follow-up questions you may have.

If none, then please remember to rate my response as that is the only way I will receive my share of the payment you have already made to the site.

Thanks very much,

Steve G.

Expert:  Stephen G. replied 2 months ago.

Did you experience problems with re-locating your question after I responded to it? AND/OR,

Did you by any chance experience problems with the rating system?

I ask as around the time of your question the site was having some issues in this regard and some of the ratings weren't credit to us. If that was an issue with you, perhaps you could just indicate your rating in words, hopefully good, very good or excellent. If you would take a moment to do that, customer service with credit me with responding to you and close out the question favorably.

Thanks very much,

Steve G.

Expert:  Stephen G. replied 2 months ago.

Phyllis:

Just checking in.....................

I'd like to close out this question before the end of the month, if possible.

I would appreciate it if you would take a moment to let me know if I can assist you further and/or if you would provide a rating for my responses as indicated above.

Thanks again,

Steve G.

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