new tax requirements for rental properties

There is a new federal act (Small Business Jobs Act) that will become effective January 1, 2011 that will require owners of rental properties to issue 1099s to service providers for those who receive more than $600 from the rental property owner in a year. If the rental owner, for instance, pays a plumber more than $600 in 2011 the rental owner will need to issue a 1099 for that income to the plumber in 2012.

 As a result, the rental owner needs to start keeping records and obtaining tax identification numbers for the service providers. If you are a rental property owner or a property manager for an owner of rental properties you should visit with your tax professional about this upcoming requirement.

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