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Personal services exchanged for rent of a home?

Danielle479
Level 1

My client has a tenant that is paying 1/3 of his rent by providing my client w/ personal services, another 1/3 with services of maintenance for the rental, and 1/3 by cash.  I'm clear that my client is earning the value of rent $ by these services whether for rental maintenance or for personal services plus of course the $ of cash  - BUT - how will this client (landlord) handle reporting the 'personal services' value back to the tenant - should there be a type of 1099-misc for this or is this the tenant's responsibility to report - ?   And to conclude, yes of course the client (landlord) will have to do a 1099-Misc for the value of the labor for rental services received.

Also - if anyone has any legal or IRS source for the personal services rendered for rent or any other type of need - ? ?   

Thanks - !

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5 Comments 5
TaxGuyBill
Level 15

@Danielle479 wrote:

 how will this client (landlord) handle reporting the 'personal services' value back to the tenant - should there be a type of 1099-misc for this or is this the tenant's responsibility to report -


 

If the client's business (including a rental that rises to the level of a business) did not pay for services (including the bartered services), no 1099 is needed.

In other words, if those "personal services" were for the benefit of the individual (not the taxpayer's business or rental), no 1099 is needed.

qbteachmt
Level 15

1099-NEC would be for services, and that's when it is between a business and a service provider.

But there are household employee rules, which are W2 and not 1099-NEC, as well, if this is personal care.

If the person renting a single family home gets a discount on rent in exchange for maintaining the property, that's not going to rise to the level of a business activity. If the person renting in a complex gets the same deal, that's starting to be property management.

Facts and circumstances matter.

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BobKamman
Level 15

In these days of JE and GM headlines, I would use a term other than "personal services."  

Danielle479
Level 1

I like your gentle 'correction' - I guess I didn't want my question to go on and on - mainly that this tenant was doing maintenance towards the rental and then also services for the landlord's personal residence - and whether, somehow those 'personal residence' services should be reported in any way on some type of additional 1099 -thanks - 🙂

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qbteachmt
Level 15

Would you report on 1099-NEC the people who rake leaves, mow lawns, move snow, pick up your prunings at your house? Your house doesn't have a profit-making intent.

Is the rent being charged/paid still within a reasonable market rate? There is a barter relationship for the rental work, apparently.

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