I need to create a 1099 for an individual that got a finders fee for a property I sold. How to I do this?

Question

A realtor was not involved in the sale, but I did give a person a cut of the profits. He said that I need to create a 1099 for him, so I can write off his portion of the sale....as well as he getting taxed on the actual income from the sale (he gave me his SS#). Is this something that I can accomplish online? I checked out the IRS sites but got a bit confused. Thanks

Answer 1

I am not sure if you can do it online or not, but any office supply store will have 1099's for sale and will normally include a 1096 which is a summary of all of the 1099's you issue. In your case the 1096 will be the same as the one 1099 you issued. I believe the deadline for filing is January 31. there are several types of 1099s and yours would be 1099-misc. It is pretty simple to fill out and a finders fee I believe would be put in box 3 for "other income" which the person you send it to will have to claim it on their tax return as income and you would be able to consider it an expense on your tax return.

Answer 2

You can print off a 1099-misc on www.irs.gov or if you have trouble go to your local H&R Block and they'll usually give you blank ones for free. Make sure to get a 1096 as well. Simply fill out your name, address, and Social security number in the payer's section. Put the realtor's name and SSN in the payee section. Then the income needs to go in Box 7. Give the realtor two copies, send a copy to the Social Security Adminstration, and keep one for yourself. The address for the Social Security Adminstration varies depending on which state you live in. The form will usually say at the bottom of it. The 1096 needs to go with the copy you send to the SSA, it simply totals all your 1099's, even though you only have 1, you still need to send it with them.

Answer 3

While at the IRS site, ask for the 1099 form. You file the form with the IRS and a copy to the person that the money went to.