I am looking for information regarding middle-of-the-year acquisition and end-of-year 1099 reporting. Other than the IRS, where can I go to get the information I need?


TAPN does not have an article specifically on 1099 reporting issues around acquisitions. However, we have answered questions from members in this area. Do you have questions about reporting payment to the owner of the acquired entity? Or is your concern with regard to 1099 reporting for payments made by the acquired entity prior to the acquisition?

In the former case, the purchase of a business is not reported on a 1099, but both parties must complete form 8594 and include it on their income tax returns for the year.

With regard to the latter, how 1099 reporting is handled in a successor/predecessor relationship has to do with the agreement between your company and the company you acquired. IRS instructions state that the successor (your company) may assume responsibility for reporting payments of the predecessor (the acquired company), provided both companies agree and that your company meets the following requirements:

1) The successor must acquire all the property used in the predecessor’s trade or business
2) The predecessor’s company made payments before the acquisition that must be reported
3) The predecessor is not required to report/withhold on payments made after the merger

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