1099-K vs 1099-NEC: Which Covers Your Real Estate Income

Key takeaways

• A 1099-NEC reports payments for services that someone paid you directly in the course of their business, such as the commissions your brokerage pays you as an independent contractor.
• A 1099-K reports payments that a card processor, payment app or online marketplace handled for you. Card and payment-app payments belong on the 1099-K, not the 1099-NEC.
• For payments made in 2026, the 1099-NEC threshold is $2,000 a year per payee, up from $600. The 1099-K threshold for payment apps and marketplaces is back to more than $20,000 and more than 200 transactions.
• Both forms report gross amounts, so match each one to your own records rather than adding the forms together.
• A missing or wrong form doesn't change what income you have. Keep your settlement statements and payment records, and talk to your CPA about how to handle a mismatch.

A 1099-NEC reports money a business paid you directly for your services, like the commissions your brokerage pays you. A 1099-K reports payments that a card processor, payment app or marketplace processed for you. Which one you get depends on how the money reached you. This guide maps each kind of real estate income to the form that usually reports it.

What is a 1099-NEC and what does it report?

Form 1099-NEC reports nonemployee compensation: money a business pays you for services as an independent contractor. If you are a commission-based agent, your brokerage is usually the payer, and commissions, referral fees and bonuses it pays you are reported here. The payer files a copy with the IRS and sends you one, generally by January 31.

Who has to issue one

The duty applies to payments made in the course of a trade or business (IRS Instructions for Forms 1099-MISC and 1099-NEC). Your brokerage issues yours. If you run your real estate work as a business and pay an unincorporated assistant, photographer or stager enough in a year, you issue one to them.

The threshold changed for 2026

For payments made in 2025, the threshold was $600 a year per payee. For payments made in 2026 it is $2,000, and the IRS says it may be adjusted for inflation starting in 2027 (IRS Instructions for Forms 1099-MISC and 1099-NEC). So the forms you get in January 2026 still use the $600 line, and the ones issued in January 2027 use $2,000.

Either way, the threshold decides who must send a form, not what counts as income. Payments below it are still income to the person who received them.

What is a 1099-K and when do you get one?

A 1099-K reports payments processed for you by a third party: card processors, payment apps and online marketplaces. The processor, not your client, sends the form to you and the IRS.

Card and payment-app transactions

If a client pays you by card through a processor, or a tenant pays rent through a payment app set up for business, those payments can show up on a 1099-K. The form shows the gross amount processed, before the platform's fees, so your records need to show both the gross and the net you actually received. That gap between gross and net is the most common reason a 1099-K doesn't match a bank deposit.

The threshold

Card processors report payment card transactions regardless of amount. For payment apps and online marketplaces, the federal threshold is back to more than $20,000 and more than 200 transactions in a year (IRS, Understanding your Form 1099-K). Some states set lower thresholds, so a form can still arrive when the federal rule wouldn't require one.

1099-K vs 1099-NEC: which form covers which income?

The two forms answer different questions. A 1099-NEC reports what one payer paid you directly for services. A 1099-K reports what a payment processor handled for you.

Neither form shows your splits, caps, dues or fees in detail. Matching the form to what each closing actually paid you is a bookkeeping job, and your CPA will want both the form and your records.

Which form do real estate agents receive for commissions?

When your brokerage pays you directly

If you are paid as an independent contractor and your brokerage pays you by check or direct deposit, your commissions are usually reported on a 1099-NEC once they reach the threshold.

If commissions reach you by card or through a payment app, the IRS rule is that those payments go on a 1099-K from the processor rather than a 1099-NEC from the payer (IRS Instructions for Forms 1099-MISC and 1099-NEC). That's uncommon for commissions, but worth knowing if a form you expected doesn't arrive.

Matching the form to your commission statements

Brokerages differ in what figure they report. Some report your share after the split; others report a larger gross figure and treat the split and fees separately. Before tax time, compare the 1099-NEC with your commission statements for the year and find out which way your brokerage does it. If the figure doesn't match your records and you can't see why, ask the brokerage before you file.

Brokernomy records each closing with its split, cap contribution, referral fee and the amount you received, so you have a year's total to set beside the form. You can see what the agent plan includes on the pricing page.

Can the same income appear on both forms?

It can happen, but it shouldn't. If a payer sent a 1099-NEC for payments that were also processed by a card company or payment app, the same dollars could show up on a 1099-K as well. Rent collected through a platform can show up on a 1099-K even though you also recorded it yourself.

The answer is to match each form to your own records, payment by payment, rather than adding the totals together. If you think income has been reported twice, raise it with the payer and with your CPA.

Which forms do landlords and flippers deal with?

Landlords and flippers can be on both sides: receiving forms for money collected, and owing forms to people they pay.

Rent collected through card or payment apps

If tenants pay by card, the processor reports those payments on a 1099-K. If they pay through a payment app or marketplace, you'd get a 1099-K once the federal threshold of more than $20,000 and more than 200 transactions is passed, or sooner if your state's threshold is lower. Rent paid by check or bank transfer straight to you comes with no form, but it is still income.

Paying contractors and property managers

The 1099-NEC duty covers payments made in the course of a trade or business. Whether a rental activity counts as a trade or business depends on your situation, so ask your CPA whether you need to issue forms to the people you pay. House flipping is usually run as a business, so flippers who pay an unincorporated contractor $2,000 or more in 2026 generally issue a 1099-NEC.

Selling a property

When a property sells, the person responsible for closing the sale, usually the settlement or title company, generally files Form 1099-S reporting the gross proceeds (IRS Instructions for Form 1099-S). Your profit still comes from your own records: purchase price, improvements, selling costs and closing statements.

Worked examples

Agent: a split and a referral fee

You close a $400,000 sale with a 3% commission: $12,000. Your broker keeps 20%, or $2,400, and you pay a $1,000 referral fee to an out-of-state agent. Your records should show the $12,000, the $2,400 split, the $1,000 referral fee and the $8,600 you kept. Compare that with how your brokerage reports the closing on your 1099-NEC.

If the $1,000 referral fee is the only payment you make to that agent in 2026, it falls below the $2,000 threshold, so no 1099-NEC is required for it. Under the old $600 rule it would have needed one.

Flipper: a contractor and a sale

You paid an HVAC contractor $3,200 in 2026 on a flip. That's over $2,000, so if the contractor isn't a corporation you generally issue them a 1099-NEC. When the house sells, the title company generally files a 1099-S for the gross proceeds. Your profit comes from your cost records and closing statement, not from the 1099-S.

Landlord: platform rent and a handyman

Tenants pay $30,000 in rent across 240 payments through a payment app, so the app sends you a 1099-K for the gross amount. You also paid a handyman $700. That's below the $2,000 threshold, so no 1099-NEC is required for it, even if your rentals count as a business.

The trap here is the gross figure. The 1099-K shows everything tenants paid through the app, including money that went out again for repairs or fees. If your records only show what landed in your bank account, they won't match the 1099-K. Keep the gross rent and each expense as separate entries.

What should you do if a form is wrong or missing?

A wrong form

Contact the payer first. If a brokerage reported the wrong amount, ask for a corrected form, and keep your closing statements, settlement sheets and emails. If it isn't fixed before you need to file, ask your CPA how to handle the difference.

A form that never arrived

A missing form doesn't change what income you had. Payments below the threshold, rent paid by check, and income from a payer who simply didn't send a form are all still income. Rental income is generally reported on Schedule E, though some rental activities are reported differently (IRS Publication 527). Give your CPA your own totals and, where you have them, each payer's name and details.

How do you keep the paperwork straight all year?

What to record each time money moves

Record each payment the day it lands: who paid, how (check, transfer, card or app), the gross amount, and any split, fee or referral taken out. How the money arrived is what tells you which form to expect in January. For flips, keep costs by property. For rentals, keep rent and expenses by property and by owner.

Where Brokernomy fits

Brokernomy tracks what comes in, what goes out, and what each closing, house, rental or owner leaves you, in your browser with nothing to download. Plans start at $12 a month for agents. When you choose a payee on each payment you record, it shows who you paid, who needs a 1099-NEC at that year's threshold, and the figures for each form, on a worksheet for you and your tax preparer. It doesn't file the forms or tax returns for you, and it isn't tax advice, so plan to hand your totals to your CPA.

FAQ

Do I need to issue a 1099-NEC to my broker for the split?

No. Your broker is the payer, so the brokerage reports what it paid you. You'd only issue a 1099-NEC if you paid someone else, such as an assistant, in the course of your business and the payments reached the threshold: $2,000 for 2026.

Will I get a 1099-K for rent paid through a payment app?

If tenants pay by card, the processor reports it. Through a payment app, you'd get one once you pass more than $20,000 and more than 200 transactions in a year, or your state's lower threshold if it has one. Personal transfers between friends and family aren't meant to be reported, so set up business payments as business. Either way, the rent is income.

What is the 1099-K threshold for 2026?

For payment apps and online marketplaces, more than $20,000 and more than 200 transactions in a year. Payment card transactions are reported regardless of amount. Some states require forms at lower amounts.

Does a title company send me a 1099 when I sell a flip?

Usually, yes: the settlement or title company generally files a Form 1099-S reporting the gross proceeds of the sale. Your profit comes from your own records of purchase price, costs and selling expenses.

What if the same income shows up on a 1099-K and a 1099-NEC?

Match each form to your own records to see which payments it covers, and raise any overlap with the payer and your CPA. Records kept by closing and by property make an overlap easy to spot.

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This article is general information, not tax advice. Rules change and depend on your situation, so check with your CPA.