Wednesday, January 19, 2011

To all ONEprop clients regarding 1099 Reporting

There have been many recent changes to tax law regarding reporting of payments you may make to ONEprop.  One change is that starting for tax year 2011 a landlord must issue a 1099 for all services provided in their role as a landlord.  Here is what our clients need to be aware of based on discussions with the Texas Association of Realtors legal staff.

For tax year 2010 and 2011 there is no need for our clients to do anything different than they have in the past.  ONEprop pays vendors for our clients so we issue 1099's to these service providers for our clients.  We have been providing this service to our clients for over ten years.  Additionally, for services provided to ONEprop during tax year 2011, there is no need for our clients to issue ONEprop a 1099 because we are a corporation and for tax year 2011 you do not need to send a 1099 to corporations.

For tax year 2012 there is a new law which will require landlords to issue 1099's to corporations.  So, if the current law remains unchanged our clients need to expect to issue ONEprop a 1099 in January of 2013.  This is a big if.  There are already initiatives in Congress to eliminate this reporting requirement.  ONEprop is supporting these efforts through our trade organizations lobbyists funded by our contributions to both the National Association of Residential Property Managers and National Association of Realtors.  We fully expect the reporting requirement to be repealed sometime before any action is required in January of 2013 so ONEprop will not be sending out a W-9 to any of our clients at this time.

If the law is not repealed we will provide W-9 information to our clients via email no later than November 30, 2012 or we may develop a plan (if approved by our CPA & attorneys) where we issue ourselves the 1099 in order to save our clients this additional work, but for right now, there is no need for our clients to do anything extra or different.  This is just one of the many things we do to help you in the management of your asset, making owning an investment property as stress free as possible.

Here is the link direct to the IRS website where the government posts the instructions for 2011 1099-misc reporting rules 

If you are getting any different information from your CPA/Tax Preparer, please provide them this information and if the CPA/Tax Preparer still has a question please ask them to contact ONEprop directly.

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