Tax & Accounting Blog

Ask the Expert: Land Lease Payment Reporting on Form 1099-MISC

1099, ONESOURCE, ONESOURCE Nonresident Alien Taxation, Tax Information Reporting August 14, 2013

Our company is acquiring some vacant land on a long-term land lease. Does that require tax reporting on a Form 1099?

Answer from Marianne Couch of COKALA Tax Information Reporting Services:
It depends on what the payment is really for. If it is a straightforward lease with fewer than 30 years remaining on the term, the payment is treated as rent, reportable in box 1 of the Form 1099-MISC. If 30 or more years remain, you have an ownership interest in the leasehold and the payments are treated as proceeds from a real estate transaction, subject to reporting on the Form 1099-S.

About Marianne:
Marianne Couch, JD Principal, Cokala Tax Information Reporting Solutions, LLC Marianne Couch, JD, of the Cokala Tax Group, is an advisor on U.S. federal and state tax information reporting compliance. She is a frequent lecturer at major tax conferences and the author of numerous published articles and the Master Guide to Form 1099 Compliance. Prior to co-founding the Cokala firm in 2007, she served for many years as Research Director of Balance Consulting, and chaired special training and advisory services provided to large organizations and academic and nonprofit institutions. She was previously the executive director of the National Association of Form 1099 Filers, Inc., and a member of the IRS Information Reporting Program Advisory Committee (IRPAC), where she served as Chair of the IRPAC Subcommittee on Small Business and Self-Employed (SBSE) tax issues. Click here to view an archive of Marianne’s blog posts on tax information reporting topics.

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