Today President Obama signed the Small Business
Jobs and Credit Act of 2010. Lots of provisions for “job creation” including one to expand, even more, the already burdensome 1099 filing requirements. More work for accountants, I suppose …..
Rental property expense payments made after Dec. 31, 2010 will require a form 1099 for payments of $600 or more to a service provider (a plumber, painter or accountant) “in the course of earning rental income.” There are limited exceptions for certain military personnel who rent their personal residence on a temporary basis, and for “individuals with only minimal amounts” as determined by the Treasury Secretary in regulations and “hardship cases”, also determined by regulations. [Yeah, right --- good luck with THAT! So rental property now looks more like a “trade or business”. I wonder if that means a change in passive loss deductibility? That’s a JOKE --- I really DO know better!]
I suggest you immediately begin testing your clients’ systems to make sure they’re robust enough to handle this extra reporting.