Something new: Today's mail included a 1099 from PayPal for app fees and occaisionally some move in fees.

You should be seeing one from Buildium as well. Any electronic payments collected by 3rd party software are supposed to send Form 1099-K to recipients.

The good things about that is, as a commercial landlord, my tenants do not have to 1099 me since their payments from thru Buildium, and they handle the reporting. E Z Cheesy!

What do you do with these 1099's since you are filling a schedule E?

6X6, if you claim all of your income it should not be a huge deal - you should be able to balance Schedule E expenditures and deductions against the income on the 1099. So you report the income on the 1099 as you would anyway, and then deduct the appropriate expenditures against it.

Just like when we send a 1099 to a contractor, one would hope he can balance some of that income against his business expenditures.

I didn't get a 1099 from Zelle, but if I did, I would just deduct that obviously from the total of rent that I recorded as being received.

I think there was a discussion about Sec Deps here; that they are income coming in and an expense when going out but don't quote me.

The schedule E can be off a few dollars from the 1099 6er. I round up or round down. The 1099 will be an exact number.

I had one 1099 that said $102,978 where I came up with $102,976. Can the IRS audit me over that $2. Absolutely. But I believe they would fine that over the course of a single tax year, that rounding up and rounding down work the same as long as you fifty cents as the middle point.

I am still waiting on mine from Innago. They said it was coming but nothing thus far.

It's a redundancy in my opinion because I declare all my rents. Innago doesn't get all my rents either, so it will be interesting to see if the accountant will charge extra for the service.

Also about SDs, I thought they were NOT included as income until you use them for repairs. I had always declared them before which made my income a little higher. Now we are not including the security deposits as income.

Security Deposits are NOT taxable income until you use them for something - then the income is balanced by the expense.

Example:

* Tenant pays a Deposit of $2000. You hold it by law in a Landlord Trust Account. No income is claimed for the year you receive it.

* Tenant moves out. Damages assessed (Financial and otherwise) are $473.25. They receive a refund of $1526.73.

Please know each state has it's own rules for handling deposits - separate accounts, interst onthe money, etc.

I like SIMPLE. KISS.

We list the deposit as income then the repairs as expense. Less handling as ways to go wrong.

YEARS ago I did a 5 years study I found I only returned 2 full deposits and 2 partial deposits over the 5 years. I had stopped accepting res damage or cleaning as "normal wear and tear" or "Cost of doing business".

(But many of you know I take a Non-Refundable FEE, not a deposit which can require special handling by state rules. If handled incorrectly the LL can be fined.)

PayPal's terms state that they offer no protection for "real estate" transactions -- which includes payments of rent or deposits from my understanding.

Therefore, shouldn't all of you who take PayPal be having them send using "Friends and Family" (I know the name is odd, but that is what they call the "no protection" option)? Why pay the fees for sending "Goods and Services" for protection that does not apply?

And note that PayPal does not send 1099s for Friends & Family payments...

W,

Thanks to your advice we're getting back homes in 99-100% move in ready without the threat of keeping deposit money.

With my Program I am KEEPING that despoit amount with their blessing.

I suggest EVERYONE try it. Customer attitudes and money habits have changed.

John,

Great reminder. I'll see if we can get that set up with our PayPal embedded link.