The QBI deduction is only allowed if you are a "trade or business", and the tax courts have resolved that rental real estate is a trade or business.However, @Vince Mathis if you are simply a passive investor in real estate and you do not claim the QBI deduction, then you don't have to issue a 1099.Keep in mind that if you don't issue a 1099 and take the QBI deduction, then you run the risk of the IRS auditing your tax return and claiming that you deducted the QBI erroneously, and charging you back taxes and penalties.When it comes down to it, you are paying taxes, why shouldn't your contractors pay taxes?