A divorced couple agreed to share their rental income in such a way that the husband will be responsible for managing the property through a real estate agent. The husband will be claiming all rental related expenses including property taxes and insurances and each year the husband will be paying a portion of the rental net income to the wife. Does the husband have to issue a 1099-MISC to the wife? Instead, can both report their specific portion of the rental income in their own Schedule E but only husband deducts the expenses? Thank you.
They could use their share of the Schedule E as joint tenants in common, and 1099 is not required. Zaher Fallahi, Attorney at Law, CPA.
Your facts are rather unclear, since you fail to indicate the legal ownership of the property. Did the decree of divorce fail to split the property in the property settlement? It the title to the property 50-50 as tenants in common? If so, the tax reporting for the property would be the same as two unrelated owners. Each splits the income and expenses.
This response is a general one, and does not constitute legal advice. There is no attorney client relationship absent a written agreement.
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