Would my business partner and I need to issue a 1099 if we split expenses 50/50 for our rental property?

Would my business partner and I need to issue a 1099 if we split expenses 50/50 for our rental property?

by Kenneth E. Bonus, CPA | Feb 01, 2018
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My business partner and I have an unofficial partnership. We do not have an LLC, and intend to file taxes as individuals. We bought a rental property together. We are splitting all expenses 50/50. We had some contractor expenses for 2017. One vendor did a single job for us that cost $800. Since we are splitting costs, the expense was $400 per person for this one vendor. Since the expense per individual is less than $600, we do not believe issuing a 1099 by either of us is necessary, even though it was one job at $800. Is this a correct assumption?

This is a bit tricky. I would most likely err on the side of issuing 1099s, regardless of amount. Then there could be no question or gray area. It's relatively easy to issue 1099s, and there are business services to assist you in generating 1099s very affordably. 

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Answered by: Kenneth E. Bonus, CPA, is principal with Bonus Accounting LLC in Butler, Pa.

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