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separate 1099-NEC forms for different properties?

theprof07
Level 1

Let's say I'm renting out two different properties as a sole proprieter.  They are treated as separate businesses, as in the QBI forms.  If I have a sole proprieter contractor perform over $600 of work during the year on both properties, should they be issued separate 1099-NEC forms for each property, or can they be issued a single form?  Relatedly, if the contractor performs $300 or work on each property, does that put them over the $600 threshold for being issued a 1099-NEC form?

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qbteachmt
Level 15

"are these two QBIs considered separate business entities"

Those are activities, and QBI is "qualified business income deduction" which points to the activity. The entity is filing the tax return. There is one entity, for that sole proprietor, and it is that person. There might be lots of activities and side hustles, so the QBI is evaluated per activity.

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PhoebeRoberts
Level 11
Level 11

Hi there,

You’ve come to an Intuit site supporting tax professionals, and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Cheers!

Hi there,

You’ve come to an Intuit site supporting Lacerte, ProSeries, or ProConnect Tax Online products. Please visit the QuickBooks Help site for the answer to your question.

Cheers!

 

qbteachmt
Level 15

"They are treated as separate businesses"

Treated as? Are factually two businesses? As separate entities, to segregate the ownership of the property? DBA?

"issued separate 1099-NEC forms for each property"

Properties don't issue paperwork. People, via their business entity, hire, incur costs, and issue paperwork. That's what happens when you are running businesses.

Have you searched the web:

property repair 1099

That will show you:

1. "over the $600 threshold:" The limit is when it reaches $600. Not when it goes over.

2. When the property owner is managing their own property, that typically is exempt for the informational filing, because that 1099-NEC provision was repealed in 2011, right when it was supposed to kick in (similar to the 1099-K issue right now).

https://www.buildium.com/blog/1099-for-property-management-2023-update/

If this is a Lacerte question, we need to know which form you are working on, the entity type, and are these a professional property management or property owner entities?

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"Level Up" is a gaming function, not a real life function.
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theprof07
Level 1

Apologies!  The Community Guidelines said that outsiders would be welcome as well, and was looking for expertise beyond that of just applying the software.

https://accountants.intuit.com/community/community-basics/discussion/intuit-accountants-community-gu...

I'll try posting in the TurboTax Community then, and see if someone there knows the answers.

Thanks!

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theprof07
Level 1

Thanks for responding!  Yes, that's the core of my question.  So as a self-managed sole proprietor of two rental properties claiming QBI status for each of them (not aggregated) via Section 162 trade or business status (which requires the use of 1099-NEC forms to qualify) rather than via the rather onerous Safe Harbor criteria, are these two QBIs considered separate business entities, such that each should be issuing separate 1099-NEC forms even to the same sole proprietor contractor (when using checks rather than electronic payment methods)?

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George4Tacks
Level 15

I think the key phrase is "SOLE PROPRIETOR" - meaning that person issues the 1099-NEC. I have never been able to talk to a rental, but I have often talked to the owner. The rental is an inanimate object, unlike an LLC that is a legal entity, or a sole proprietor that can even breath and feel pain. 


Here's wishing you many Happy Returns
qbteachmt
Level 15

"are these two QBIs considered separate business entities"

Those are activities, and QBI is "qualified business income deduction" which points to the activity. The entity is filing the tax return. There is one entity, for that sole proprietor, and it is that person. There might be lots of activities and side hustles, so the QBI is evaluated per activity.

*******************************
"Level Up" is a gaming function, not a real life function.
theprof07
Level 1

thanks!

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