1099 for contractors for buy/hold investor

[Joe Kim]

I'm a PASSIVE buy and hold investor.  I have property managers and I buy from turnkey providers.

I want to barely look at my monthly statements and let my investment grow as passive as I can.

That "passive" investing becomes very active during tax season.  Even though my property managers send me end of year statements, it paperwork and tax info gathering just kills me.

I love the chase but hate the house cleaning.

Here is my question:  As a purely passive buy/hold investor, do I need to generate a 1099 for contractors for times greater than $600.   Now, most of my repairs are done via property managers but a few big ticket items were done outside of the property managers like - roof replacement.

So far it's clear that if you are running an active flipping or do a lot of rehabbing, you need to generate 1099s.   But on the forums at least, it seems to suggest that as a buy/hold passive investor, that 1099s are optional.

I would really like to hear from other pure buy/hold investors about how they have been doing tax preparation.

Sadly, I just learned about 1099s just now and scrambling to get them done.  

Buy/Hold REI just seemed much less passive after learning about 1099s.

[Brandon Hall]

@Joe Kim your CPA is incorrect and I suggest you consider finding a real estate savvy CPA post-tax season. 

H.R. 4 (P.L. 112-9) repealed the 1099 rules for real estate investors engaged in rental activities. The exception is if you materially participated in your rental activity and it rises to the level of a trade or business. The most obvious case of this is being designated a real estate professional in regards to your rental activities.

Now, if you want to be super conservative, you should a 1099 everyone you've paid over $600. Just know that it's not necessary and that a CPA saying that you must do so, without caveating with the H.R. bill, probably doesn't know real estate tax inside and out like they may claim to.

And if they are charging anything more than $15 per 1099 or not referring you to a webservice (like track1099.com) then you should also consider switching service providers. 

@Daria B.