1099 forms

[anepcar]

Do you need to issue 1099 form for self charged interest  and self charged rent

[Just-Lisa-Now-]

what exactly is self charged interest and self charged rent?

[IRonMaN]

Popular night for posting twice 😞

[anepcar]

This is when a partner or shareholder lends money to his own company, and is getting paid interest, it is reported as passive or non passive depending on the certain condition. This interest will be offset on schedule e and not be recorded on schedule B. The same thing applies when a partner who owns the building is renting it to the partnership, this is non passive income.

[qbteachmt]

You are being too vague, to get direct help. You cannot use the words "business" and "company" and phrases such as "partner or shareholder" when the specifics of the entity types and the relationships matter to know how the regulations apply to any specific scenario. On the face of it, your question using the phrase "self charged" means it likely isn't allowed at all. But, you might be able to better define and explain the entities, the people, and the relationships for who owes what to whom and why.

You might start with Whose Tax Form are you preparing, for perspective.

[anepcar]

Let me be more specific. The client has multiple companies setup as LLC, the building is owned by one LLC and it leases it to his another LLC. The owner of the building is a disregarded entity. The rent is classified as self rental on schedule E which will make it non passive and wash off with  the expense from the LLC that is paying the rent. The member of the LLC also lends money to his own company instead of increasing his capital investment in the company, he is charging interest on the loan. The interest that the company is paying him back can not be part of his portfolio, but instead be included as income on his schedule e to wipe off what he charged himself. His attorney created the loan documents between the member and the company for liability purpose.

[IRonMaN]

But if he is a single member LLC, that is like the left pocket charging the right pocket interest.