The Small Business Lending Fund Act that passed in 2010 addresses rental properties and new tax reporting requirements. "Under the provision, recipients of rental income from real estate generally are subject to the same information reporting requirements as taxpayers engaged in a trade or business," the Joint Committee on Taxation reported.

photo credit: Sweet One

When using contractors on your rental properties, you must provide a 1099 for every billing over $600.00. "Fines would double for each 1099 form someone fails to send to the IRS, increasing to $60 for individuals and $250 for small businesses." Reported the Washington Examiner. The maximum penalty for not filing could be up to $250,000.

"You've got to be kidding me," said Tom Schatz, president of the watchdog group Citizens Against Government Waste, when told about the provision. "Honestly, it's an outrageous burden for rental owners."

The new law is now in effect as of January 1, 2011. These penalties apply to any small business who files 1099 forms.

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Posted in Buyer Resources, Seller Resources, Real Estate Trends, Real Estate Market Conditions, Blogging

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