How do you pay an UNofficial bird dog???

[Greg B.]

Good afternoon BP,

I have a quick question about paying a bird dog that isn't in the business to bird dog? If someone brings me a property address and I end up closing on it then pay the dog a few hundred bucks, I'm going to account for it in my books (right?). So at the end of the year when doing taxes I will expense that out. The issue I'm having is do I send this unofficial bird dog a 1099 or whatever? How do you experts handle the fee?

[Ethan Painter]

I would definitely consult with a CPA. I am not one, but I am a full time tax auditor for the Treasury department. This is not legal advice, but if you pay them $600.00 or more in one year, you would be legally required to send them a 1099. Check out this link for detailed information. 

https://www.irs.gov/instructions/i1099msc/ar02.html