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Todd S

1099 Question

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I think I know the answer to this question but I want to make sure. A Seller with whom I have done a sandwhich Lease Option just sent me an email that asked when I was sending the 1099 tax form for the rental income on the home for the past year. He is refering to the cash flow he had between my payment to him and his mortgage payment (about $50 per month). Is this something that needs a 1099 or just basic documentation on his taxes to account for the income?

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Your landlord already has a 1098 from his loan servicer for the mortgage interest he is paying on his loan.

Since he asked for one, give your landlord a 1099-MISC for the total amount of rent you paid him during the past year. He will net his mortgage interest against the rental income on Schedule E when he files his tax return.

 

You can download the 1099-MISC and its instructions from the IRS website. As i recall, you may have until Feb 15 to file your copy with the IRS, while the deadline to give your landlord his copy is Jan 31.

 

Since you are in a sandwich lease, you will want the 1099-MISC to document your expense against the rental income you are getting from your tenant-buyer.

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Thanks Dave for the info,

 

Should I send the 1099-misc to all of my homeowners in a Sandwich lease option or just the one that requested one?

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Thanks Dave for the info,

 

Should I send the 1099-misc to all of my homeowners in a Sandwich lease option or just the one that requested one?

 

Homeowners??

 

If you mean landlord-sellers, the answer is YES. Your copy of the 1099-MISC will document your expense against the rental income received from your tenant-buyers.

 

If you mean tenant-buyers, the answer is no. These folks are paying you rent. None of their rent is a deductible housing expense.

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