January 20, 2010

Churches Issuing Form 1099-MISC to Landlords

Question:

A church rents its facility from a individual. Does it need to issue a Form 1099-MISC to its landlord?

Answer:

Yes

The instructions for Form 1099-MISC require that rent payments be reported in Box 1. Only "trades or businesses need to report rent payments. Personal payments are not reportable. ... Nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements."

The instructions offer the following exceptions that may apply to churches in some situations. "Some payments are not required to be reported on Form 1099-MISC, although they may be taxable to the recipient. Payments for which a Form 1099-MISC is not required include:

Generally, payments to a corporation
Payments for merchandise, telegrams, telephone, freight, storage, and similar items
Payments of rent to real estate agents"

2 comments:

  1. Hello
    If I am renting space monthly or annually from another church for use of the building should we send them a 1099 misc. for rent we paid to them for building use?

    ReplyDelete

  2. Payments from one 501(c)(3) organization to another 501(c)(3) organization are not subject to Form 1099-MISC reporting.

    We wrote a blog post about this subject on January 29, 2015:

    http://ministrycpa.blogspot.com/2015/01/review-form-1099-payments-to-501c3.html

    ReplyDelete