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New client owns two apartment buildings. The client is organized as a family trust. They have never issued 1099MISCs to any of their vendors. They said they understood that they would not qualify as a trade or business and would not be responsible for issuing 1099s. Is that correct? |
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Technically yes they are not a "business" but even individuals should give 1099's to vendors if it is tax deductible to them so that income matching is not in question. Such as a 1099 to a babysitter or some other employee that you are deducting on your return so that this information is then "matched" essentially with someone picking up the tab for the tax. |
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Actually, the "family trust" is in the rental real estate business which is a Sec 1231 asset. The family trust is similar to an individual, family limited partnershp or llc with rental real estate operations. |
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If they made the threshold and are not incorporated file the 1099 |
