The preamble to the Section 199A final regulations contains the following new sentence:

… taxpayers should consider the appropriateness of treating a rental activity as a trade or business for purposes of section 199A where the taxpayer does not comply with the information return filing requirements under section 6041.1

Tax code Section 6041 requires a trade or business to issue 1099s to certain vendors.2

So, the IRS is saying that you “should consider the appropriateness” of NOT giving 1099s to vendors if you are asserting that your rental property qualifies as a trade or business for the Section 199A tax deduction.

Before you make such a decision, consider first the new IRS safe harbor on 199A rentals and then some rental property history with 1099s. ... Log in to view full article.