IRS Section 1.6041-1(e)(5) Example 5


If you read form 1099-MISC instructions for “Box 1. Rents”, there is a paragraph that states “See Regulations section 1.6041-1(e)(5), Example 5.”. We have been getting inquiries from some of our 1099 software users who can’t locate the section referred to by this paragraph.

Below is the text for Example 5 from section 1.6041–1 (this text is taken AS IS from the US printing office – ):

“Example 5. G is a rental agent who manages certain rental property on behalf of property owner H. G finds tenants, arranges leases, collects rent, responds to tenant inquiries regarding maintenance, and hires and makes payments to repairmen. G subtracts her commission and any maintenance payments from rental payments and remits the remainder to H. With respect to payments to repairmen, G is performing management or oversight functions and is subject to the information reporting requirements of section 6041. With respect to the payment of rent to H, G is subject to the information reporting requirements of section 6041 regardless of whether she performs management or oversight functions or has a significant economic interest in the payment. See § 1.6041–3(d) for rules relating to rental agents. See § 1.6041– 1(f) to determine the amount that G should report to H as rent.”

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