Posted By:
Bill Todd...but I believe that if you're being a strict constructionist then it's the consignor who should be issuing a 1099 to the auction house. After all, who's providing the service here? If your item hammers down for $10,000, and you've negotiated a 5% fee, then essentially you've just paid the auction house $500 for their services in preparing, marketing, and displaying the item.
On the other hand, you could consider that the auction house is acting as a broker. In this case, the broker's fee is split between the buyer and the seller, and they should both be providing a 1099 to the house.
Yet another view is that the house is purchasing the item for resale, at a price to be determined by the market. In this case, there's no "service" provided other than what would normally be expected of a seller, so no 1099 would be required. It's no different from buying office furniture from Office Depot.
I've run out of hands, so I'll quit now.
Bill