This law was repealed as of April 13, 2011.
Internal Revenue Code §6041
Added by H.R. 5297 and H.R. 3590
Effective: January 1, 2011 and January 1, 2012, as indicated below
Effective January 1, 2011:
When any person other than a corporation who is a landlord or property manager pays $600 or more to any one individual or entity during the year for wages or services, or makes disbursements related to the rental property, they must report the payment to the Internal Revenue Service (IRS) on the appropriate IRS form, generally the 1099-MISC.
The report must include the:
- total amount of the payment;
- recipient’s name;
- recipient’s address; and
- recipient’s federal taxpayer identification number (which the recipient is to supply the person reporting on demand).
The following landlords are exempt from this reporting requirement:
- active military or intelligence personnel if a substantial amount of their rental income is from the temporary rental of their principal residence;
- individuals whose rental income is less than a minimum amount (to be set by future regulations); and
- hardship cases (as determined by future regulations).
Effective January 1, 2012:
Profit corporations will also be subject to this reporting requirement.
Additionally, individuals or profit corporations who, in their trade or business, pay $600 or more for the purchase of real or personal property must report the payment to the IRS.
Editor’s note —These new laws do not require the withholding of taxes from these payments, merely the IRS reporting of payments. This 1099-MISC reporting requirement makes landlords (and all other individuals or profit corporations in business) the unpaid auditing arm of the IRS.