1099 for unpaid rent (by Mike [PA]) Feb 14, 2017 5:58 PM|
1099 for unpaid rent (by Dave [DE]) Feb 14, 2017 6:29 PM
1099 for unpaid rent (by John... [MI]) Feb 14, 2017 6:54 PM
1099 for unpaid rent (by Shirley [MN]) Feb 14, 2017 9:10 PM
1099 for unpaid rent (by don [PA]) Feb 14, 2017 9:15 PM
1099 for unpaid rent (by James [MO]) Feb 14, 2017 10:30 PM
1099 for unpaid rent (by BRAD 20,000 [IN]) Feb 14, 2017 11:26 PM
1099 for unpaid rent (by Steve [MA]) Feb 15, 2017 3:30 AM
1099 for unpaid rent (by Vee [OH]) Feb 15, 2017 5:28 AM
1099 for unpaid rent (by Emily [TX]) Feb 15, 2017 7:07 AM
1099 for unpaid rent (by John... [MI]) Feb 15, 2017 7:45 AM
1099 for unpaid rent (by Nicole [PA]) Feb 15, 2017 10:03 AM
1099 for unpaid rent (by Steve [MA]) Feb 15, 2017 11:02 AM
1099 for unpaid rent (by WMH [NC]) Feb 15, 2017 11:36 AM
1099 for unpaid rent (by Bill [NC]) Feb 16, 2017 12:46 PM
1099 for unpaid rent (by BRAD 20,000 [IN]) Feb 17, 2017 8:23 PM
1099 for unpaid rent (by Ray-N-Pa [PA]) Feb 18, 2017 4:55 PM
1099 for unpaid rent (by Emily [TX]) Feb 19, 2017 9:34 AM
1099 for unpaid rent (by John... [MI]) Feb 20, 2017 9:00 AM
1099 for unpaid rent (by Mike [PA]) Posted on: Feb 14, 2017 5:58 PM
I've seen some articles on this ..
Particularly in PA, can I send a 1099 to last address known of a tenant who stuck me for rent?.
I'm tired of using the courts to win worthless judgments. I'd rather
send in a 1099 to IRS and let tenant be on the defensive end for once.
Has anybody done this preferably in PA. and what version of 1099 is it, C, Misc, or what
1099 for unpaid rent (by Dave [DE]) Posted on: Feb 14, 2017 6:29 PM
If you do that, you cannot legally go after them for it ever. If you make sure to get the judgment on their credit report they may get tired of getting rejected for loans and credit cards and try to get it paid. All the 1099 does is increase their taxes and makes you feel good, but has no chance of putting money in your pocket.
However the threat of issuing a 1099 and explaining it's implications may get them to settle the obligation.
At least that's how I see it.
1099 for unpaid rent (by John... [MI]) Posted on: Feb 14, 2017 6:54 PM
Indeed -- there is really no reason to do this unless you just want to get "revenge" against them.
You have to give up all rights to those funds and it doesn't really get you anything. (There is no write off or anything for "losing" this because it wasn't income yet -- contrary to what some people think sometimes which is why I mention it here.)
What is your goal? To just try to screw them a bit because you're SURE you'll NEVER get that payment? Then, sure, you could do it.
But, probably better off not. Once in a while, something changes in their life and they end up paying you something to try to get things corrected.
1099 for unpaid rent (by Shirley [MN]) Posted on: Feb 14, 2017 9:10 PM
I talked with someone at IRS who said that unpaid rent did not qualify for a 1099. --24.56.xxx.xxx
1099 for unpaid rent (by don [PA]) Posted on: Feb 14, 2017 9:15 PM
It is not that you are 1099ing them for "unpaid rent." You must notify them that you are forgiving their debt to you. This forgiven debt qualifies as income and you can 1099 them on that income. As others have pointed out, should they ever get some assets it won't help you because the debt is gone. --73.141.xxx.xxx
1099 for unpaid rent (by James [MO]) Posted on: Feb 14, 2017 10:30 PM
How do you issue a 1099 for income you didn't receive? --65.26.xxx.xx
1099 for unpaid rent (by BRAD 20,000 [IN]) Posted on: Feb 14, 2017 11:26 PM
Revenge is a bad motivation for any business move.
Let the judgment keep earning interest.
Learn the system. It's not hard but most LLs are too stubborn to learn and work the system to their advantage. There ARE ways to get your money.
Just signed off on the final paymemt of a 5 year old judgment. My "revenge" was the extra $1000 they had to pay us in interest.
Got a call today. Res' brother wants to pay off his sister's judgment so she can by a mobile home.
The judgment will "hurt" them more than a 1099.
And I agree, the threat of the 1099 is more effective than the 1099.
1099 for unpaid rent (by Steve [MA]) Posted on: Feb 15, 2017 3:30 AM
In 40+ years of LLing I have only once issued a 1099 nec for forgiveness of debt (included some rent, some damages & some interest). At the time I presumed that this person, short of winning the lottery, would not be in a position to pay any of the monies owed in the next few years. I will admit that my true motivation was the colorful messages describing my LLing abilities which they spray painted on the apartment walls.
I waited 2 years before declaring this debt forgiven. I sent the 1099 to them at their last known address, the MA dept of revenue & the IRS. AIR it took another 3 years before the tax hounds caught up with them. In the end the tenant's bank accounts were frozen and the IRS made their life very unpleasant. I never received a dime but I did enjoy knowing that I caused them as much if not more aggression than they caused me. In retrospect, I should have just taken the high road & periodically checked to see if they had the resources to settled their debt. By the way this was over 20 years ago & they are still not in a position to even pay the interest let alone the original debt. --72.93.xxx.x
1099 for unpaid rent (by Vee [OH]) Posted on: Feb 15, 2017 5:28 AM
In my area we nick name it forgiven debt, if they are on subsidy housing it instantly puts them into a risky position and they often have to suddenly come clean to keep the program giving them the place they went to. It also messes with income reporting for child support and other tracking programs. --76.188.xxx.xxx
1099 for unpaid rent (by Emily [TX]) Posted on: Feb 15, 2017 7:07 AM
I have considered this in the past, but always decided it was not worth it. Yes, it may feel good to "report" them but what do you really gain? As others have said, it's forgiveness of debt, so you are officially declaring you will never get the money. Maybe you won't anyway, but who knows?
To answer the question, the correct form is a 1099-C which is used for Cancellation of Debt Income. --155.201.xx.x
1099 for unpaid rent (by John... [MI]) Posted on: Feb 15, 2017 7:45 AM
Steve: I have two questions that I'm curious about:
1. How did you know, 3 years later, that the IRS froze their accounts? I mean, if you forgave the debt, you're out of the picture. Why do you know so much about an ex-tenant 3 years later?
2. And, now 20 years later, you STILL know their financial situation? Dude -- at what point do you stop stalking an ex-tenant? ;)
1099 for unpaid rent (by Nicole [PA]) Posted on: Feb 15, 2017 10:03 AM
Based only on my assumptions - not actual facts of the way issuing the 1099 for cancellation of a debt works. You are actually giving the tenant a break.
They owe you $1000. If they ever come clean, you will get your $1000 along with whatever else your jurisdiction mandates - hopefully interest and costs... so their pocket will be out - making this up - $1200.
You issue them a 1099. They are in the 25% bracket. They now owe $250 in taxes.
which is the better out of pocket deal for them !! --72.95.xx.xx
1099 for unpaid rent (by Steve [MA]) Posted on: Feb 15, 2017 11:02 AM
John MI, I bumped into him at the gas station & he let me know about the IRS. I had a hard time not laughing about his problems. Both his mother & his sister were both tenants of mine at another property. Even after the mother went into senior housing & the sister move out, when ever I saw them, they would give me updates on him. --72.93.xxx.x
1099 for unpaid rent (by WMH [NC]) Posted on: Feb 15, 2017 11:36 AM
Some of my tenants were in the ZERO percent bracket, especially the ones that owed me money. --173.22.xx.xx
1099 for unpaid rent (by Bill [NC]) Posted on: Feb 16, 2017 12:46 PM
Look up 1099C --184.2.xxx.xxx
1099 for unpaid rent (by BRAD 20,000 [IN]) Posted on: Feb 17, 2017 8:23 PM
Just got a call today. Brother wants to pay off Sister's judgment so she can buy a mobile home. $500 of interest on top of the unpaid $1550.
I meet him tomorrow.
The ones that DO pay cover all the costs of holding and following the other judgments.
1099 for unpaid rent (by Ray-N-Pa [PA]) Posted on: Feb 18, 2017 4:55 PM
You use a 1099-C since you are canceling a debt that is owed to you. This then is treated as income for the former tenant.
What makes you think that the former tenant is not collectable at all?
Are there any best practices that can be learned ? --24.239.xx.xxx
1099 for unpaid rent (by Emily [TX]) Posted on: Feb 19, 2017 9:34 AM
Side note, if a 1099 is issued for cancellation of debt income, and subsequently the debt is paid....then the tax payer is simply up a creek. The 1099 isn't rescinded and/or the taxpayer cannot claim any kind of deduction.
I saw this from time to time when I worked in auto finance. We issued 1099-C forms for customers whose loans had been written off as uncollectible. Occasionally, especially if the write-off was at the end of the year, the payment would come in right before or around the issuance of the 1099. Customers were understandably irritated, but if the write-off was during the previous taxable year, then there was forgiveness of debt income for that year. Subsequent payment doesn't cancel it out. --155.201.xx.xx
1099 for unpaid rent (by John... [MI]) Posted on: Feb 20, 2017 9:00 AM
So, I am curious -- were you allowed to keep that payment? I mean, if you've forgiven/cancelled the debt, then they don't owe you anything any more. It'd be like someone mailing you a check for $500 that they didn't owe. For that person, you'd RETURN the mistaken $500 payment, right?
So, did you return the payments from those people that you had forgiven the debt for? Technically, it is no longer a debt owed to you once you issued the 1099-C, right?