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Residential Property Management/Property Management 1099 question

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Question
I have a property management company. I receive checks made payable to our property management company and I deposit them into my account. Then I pay the owner their rent minus my commission. For some property owners, the checks are made payable directly to the landlord from which I receive only my commission fee. How do I report this on the 1099 for the property owners? Do I include the entire amount even though some money was paid directly to them, or just the amount we received payable to the company? Also what amount do I use for Part 1 Income on Schedule C line 7 for gross income? Please help!

Answer
We don't have a situation such as you described, so I'm not sure if you would need to issue a 1099 to your owners that elect to have rents sent directly to them. I doubt you would need to, but I suggest you ask your accountant that question to be sure. If it turns out you do, the amount on the 1099 would be for all gross rents received from the tenants (not the amount you send to the owner in the form of distributions).

Residential Property Management

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Mike Fortunato

Expertise

Very familiar with all aspects of property management (tenant/landlord issues, lease administration, facilities maintenance, financials, etc). 25+ years in property management

Experience

I have been in real estate management for 25+ years, both residential and commercial properties. Currently own and operate a commercial and residential real estate management company in southern California.

Organizations
IREM; BOMA; MLS; National Association of Realtors; California Association of Realtors

Education/Credentials
CPM (Certified Property Manager) and RPA (Real Property Administrator)

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