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    yoyash's Avatar
    yoyash Posts: 1, Reputation: 1
    New Member
     
    #1

    Jan 30, 2007, 10:39 AM
    1099 for contractor
    Here is the situation.

    1. Company "ABC. Inc", a S corporation has performed service to another company "123, Inc".

    2. ABC company send invoice to 123 company for the service.

    3. ABC company asked 123 company to issue the check to the individual name of the ABC company's officer, owner.

    4. ABC company received the check from 123 company for the amount and the name they requested..

    5. ABC company cashes the check and recorded entire amount as the income for the company and paid appropriate taxes.

    6. ABC company gave W-9 with ABC company's EIN to 123 company for the record.

    Question is...

    Does 123 company must file 1099 against the individual whom check was issued as a 1099 misc individual income? The check was issued to individual yet the payment was for the contract job between the ABC company and 123 company.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,815, Reputation: 846
    Senior Tax Expert
     
    #2

    Jan 30, 2007, 11:31 AM
    No Form 1099-MISC is required, even though the check was issued in the owner's name. The check was constructively received by ABC Company and entered on its books as payment from 123 Company.

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