1099-NEC for services rendered?

[K-t-F]

I was asked by a financial advisor of a single member client just now:

"should the plan issue a 1099-NEC to a person who did some work on the property the plan owns?" 

Thinking it through I would say yes.  I would also guess that whatever account pays the RE tax bills would be the account that issues the 1099-NEC. 

Anyone have a quick answer?  Of course the 1099 was due yesterday.

Thanks

[K-t-F]

No one huh.... 

So... when a plan pays expenses for TPA work or to the financial advisor... does the plan not need to issue a 1099?  

[Peter Gulia]

When whichever person is responsible asks for its lawyer’s or certified public accountant’s advice, one might consider:

Exactly which person paid the nonemployee contractor?

Did a real-estate holding company pay the contractor?

Did a real-estate service company pay the contractor?

Or did a trustee of the retirement plan’s trust pay directly?

If it was a direct payment from the retirement plan’s trust, was that payment made “in the course of [the trust’s] trade or business”?

https://www.irs.gov/pub/irs-pdf/i1099msc.pdf

[Luke Bailey]

11 hours ago, K-t-F said:

I was asked by a financial advisor of a single member client just now:

"should the plan issue a 1099-NEC to a person who did some work on the property the plan owns?" 

Thinking it through I would say yes.  I would also guess that whatever account pays the RE tax bills would be the account that issues the 1099-NEC. 

Anyone have a quick answer?  Of course the 1099 was due yesterday.

Thanks

K-t-F, I will assume that the person that did the work (a) was not a party-in-interest/disqualified person so there was no prohibited transaction, (b) was an individual, (c) was not an employee of the plan, and (d) was paid more than $600. I will assume also that the individual was paid by the plan from its own funds, not by the plan sponsor or a plan participant. If all the above is true, I would agree with you that the plan should issue a 1099-NEC.