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Congress Repeals 1099 Requirements for Real Estate Property Owners

April 20, 2011

We recently wrote how the federal Small Business Jobs Act, signed into law on September 27, 2010, included a little noticed and controversial provision (Section 2101) that extended the information reporting requirements applicable to taxpayers engaged in a trade or business to real estate rental property owners. The new law for the first time would have required those rental property owners to issue a Form 1099 to each service provider to which the property owner made a payment of $600 or more in any year.

Retroactively Repealed

With the ink barely dry on the 2010 legislation, the U.S. House and U.S. Senate recently approved H.R. 4,1 which retroactively repeals this new information reporting provision and permits real estate rental property owners to proceed as if Section 2101 of the Small Business Jobs Act were never enacted. The principal impacts of this retroactive repeal are that real estate rental property owners will not be required to make informational filings for payments to their service providers or implement the expanded record-keeping program that the filing requirement would have necessitated.2

For more information, or if you have questions, please contact Brian J. Page, at 616-776-7509, or Wayne D. Roberts at 616-776-7514, who are both resident in Dykema's Grand Rapids office.


1H.R. 4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, was signed by the President on April 14, 2011.

2This repeal does change previously existing law under which certain reporting obligations might apply to a real estate rental owner whose activities arise to the level of conducting a trade or business under applicable IRS guidelines

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Readers should seek specific legal advice before acting with regard to the subjects mentioned here. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments on this newsletter, or any Dykema publication, are always welcome. © 2011 Dykema Gossett PLLC.
 

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2018 Dykema Gossett PLLC.