1099-MISC Gross Rent or Net Rent

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When a Real Estate Agent reports 1099-MISC to the property owner, he normally reports at gross rent as per Regulations section 1.6041-1(e)(5) and in accordance with § 1.6041-1(a)(1)(i)(B) and (2)

But it looks a bit awkward.
1. As the Real Estate Agent is the person who controls most of the payments, like repairs and renewals, utility bills, etc. from his own bank account, and he will be in a better position to issue 1099 MISC to those vendors. If the property owner is issuing 1099-MISC, then he has to keep all the record keeping including collecting W9 and so what is the use of keeping an agent.
2. If the IRS wants to keep track of the expenses made by the owner, it is easy as the owner normally pays mostly the mortgage payments for which he normally gets a 1098. If the owner gets 1099-MISC for the net rent, the only expense he has to report is the mortgage payment and may be some other out of pocket expenses.
3. The IRS gets better control over the business of the Real Estate Agent as well (it is Real Estate Agents business too as it is the Property Owners), as they can easily see the expenses in terms of actual payments, whether it is a payment to plumber or to the property owner.
4. Payments of rent made to rental agents by tenant required no return of information either as per 1.6041-3.
5. To determine the amount to include in 1099-MISC we have to look at 1.6041–1(f), which should be net amount, rather than the current regulation of gross amount.
6. If the property owner could not issue a 1099-MISC back to the Real Estate Agent for the fees or commission, he may get a penalty. Is not this an awkward situation?

Hope IRS will look into this oversight.
 
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