As to required information reporting for your rental
payments, you are required to file a Form 1099-MISC with
respect to your rental payments UNLESS you pay the rent to a
real estate rental agent of the owner. See Treas. Reg.
1.6041-3(d).

In other words, if you pay the rent directly to the property
owner (or to any person other than a rental agent, e.g., a
property manager who manages the real estate for the owner),
you must file a Form 1099-MISC regarding the payment;
conversely, if you make your rent payments to a property
manager, you do not have to file a Form 1099-MISC.

The instructions to Form 1099-MISC, on page one, state this conclusion in
a somewhat ambiguous manner, by merely stating that payments to rental
agents do not have to be reported on Form 1099-MISC, the negative
implication being that any other payment of rent does have to be so
reported.

As to your other questions, your "principal place of
business" will generally be the place where you perform
substantial administrative and management functions, i.e.,
your headquarters. In this case, that's most likely to be
your home office, rather than your remote shop. See Code
Sec. 280A(c)(1)(flush language).

Your rental payments for both shops (the garage attached to
your house and the remote shop) should both be deductible as
ordinary and necessary business expenses, at least on the
facts as described. Code Sec. 162.

Your transportation expenses to and from your garage/shop
and your remote shop are deductible, provided that you meet
the required substantiation and record-keeping requirements.
See, e.g., Rev. Rul. 99-7 (allowing deduction of costs of
travelling between residence/principal place of business and
another work location).

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > <`< ================================================== ===== >

I own and operate a small schedule C business out of my
rented home. When I moved in several years ago the landlord
agreed to build onto the residence a new attached
garage/shop to my specifications to serve the needs of my
business. He gave me two rental contracts, one personally
for the residence and another to me dba for the garage/shop.
I have been deducting the shop portion of the rent as a
business expense. This year I found it necessary to rent
additional warehouse/shop space in a remote location as I am
overflowing the home shop. I do still use the home shop for
business. My questions:

Can I still consider my business location my home even
though I rent business property elsewhere?

Can I deduct both rents as business expenses?

Can I deduct the mileage between my home shop and remote
shop?

And finally, while reading the instructions for 1099-misc (I
sub-contracted some jobs to a competitor when I was too busy
and am sending him a 1099-misc -- correct?) I noticed that
it says under Box 1. Rents "Enter amounts of $600 or more
for all types of rents ... paid for office space ... machine
rentals ..." Should I be sending 1099's to my landlords? I
haven't in the past. This seems rather far fetched. I've
spoken with the business operators in the rented warehouses
on either side of mine and they have never heard of such a
thing. Yet the 1099-misc instructions does seem to say
this. Also, I occasionally rent equipment from various
competitors. Do I need to send them one for the rentals
too? I don't have TIN's for any of these people.

Thanks for your insight.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >