Legal Alert: New Reporting Requirements for Rental Property Owners Start in 2011
Owners of rental property should be prepared to keep more detailed records regarding payments made to service providers starting January 1, 2011. The 2010 Small Business Jobs Act (SBJA) requires an owner of rental real property to issue a Form 1099-MISC to each service provider paid at least $600 during the taxable year. Prior to 2011, persons receiving rental income from real estate were not considered to be engaged in the "trade or business" of renting property and, as such, did not have to file a Form 1099 to service providers in relation to such rental property. In order to properly complete a Form 1099-MISC, the property owner must have the name, address and taxpayer identification number of each service provider that it paid $600 or more during the year.