id = "1099-a-members-check-through-financing-counts"
title = "A member's own check for the company counts toward the payee's 1099; their card doesn't; unknown stays unknown"
rule = """
The payer is the person who makes the payment in the course of its trade or
business. A person paying on another's behalf is the payer only if it
performs management or oversight functions or has a significant economic
interest; writing checks at another's direction is neither. A member who
pays a company bill from their own funds at the company's direction, the
company bearing the cost through its liability to the member, leaves the
company the payer: the member's check counts toward the payee's 1099. The
member's personal card is a payment card: excluded (Form 1099-K). A
member's payment whose method isn't recorded is undetermined, never
guessed; the payee is reportable only if what certainly counts reaches the
threshold.
"""
status = "AUTHORITY"
sources = [
  "Treas. Reg. §1.6041-1(a)(1)(i), (e)(1) (docs/spec/sources/irs-1099-payment-method.md)",
  "Treas. Reg. §1.6041-1(a)(1)(iv)",
  "26 U.S.C. §6041(a), as amended by Pub. L. 119-21 §70433 (docs/spec/sources/irs-1099-thresholds.md)",
]
tags = ["1099", "financing", "member-paid", "instruments"]

[setup]
currency = "USD"
fiscal_year_start = "01-01"
basis = "cash"
rounding = "half-away-from-zero"
cash_accounts = ["1000"]
financing_accounts = ["2100"]

[[setup.accounts]]
code = "1000"
name = "Bank"
type = "asset"

[[setup.accounts]]
code = "2100"
name = "Due to Members"
type = "liability"

[[setup.accounts]]
code = "6000"
name = "Contract Labor"
type = "expense"

[[setup.instruments]]
label = "Riley's checks"
kind = "member_cash_or_check"
account = "2100"

[[setup.instruments]]
label = "Riley's Visa"
kind = "member_card"
account = "2100"

[[setup.payees]]
name = "Dana Studio"
form = "1099-NEC"

[[events]]
date = "2026-05-01"
description = "Logo, paid by a member's personal check"
payee = "Dana Studio"
instrument = "Riley's checks"
lines = [
  { account = "6000", side = "debit", amount = "2500.00" },
  { account = "2100", side = "credit", amount = "2500.00" },
]

[[events]]
date = "2026-06-01"
description = "Icons, charged to a member's personal card"
payee = "Dana Studio"
instrument = "Riley's Visa"
lines = [
  { account = "6000", side = "debit", amount = "800.00" },
  { account = "2100", side = "credit", amount = "800.00" },
]

[[events]]
date = "2026-07-01"
description = "Revisions, paid by a member (how not recorded)"
payee = "Dana Studio"
lines = [
  { account = "6000", side = "debit", amount = "300.00" },
  { account = "2100", side = "credit", amount = "300.00" },
]

# By hand: counts 2,500.00 (the member's check); excluded 800.00 (their
# card); undetermined 300.00. What certainly counts, 2,500.00, is at least
# 2,000.00 however the 300.00 turns out: reportable, on 2,500.00 (or
# 2,800.00 once the 300.00 is known to be a check).
[[expect]]
query = "vendor_1099"
payee = "Dana Studio"
from = "2026-01-01"
to = "2026-12-31"
values = { status = "reportable", threshold = "2000.00", paid = "2500.00", excluded_card = "800.00", undetermined = "300.00", not_reportable = "0.00" }