Reporting Rental Income and Expenses
Reporting Rental Income You must report rental income on your tax return for the year you actually or constructively receive it. You constructively receive income when it is made available to you, for example, by being credited to your bank account. Any income you receive from the rental of residential or nonresidential real estate is rental income, and must be included in your gross income. microphone rental new orleans In addition to the actual rental payments you receive, the following must also be included in rental income: Advance rent You must include advance rent in your rental income in the year you receive it, regardless of the period covered, or the method of accounting you use. Advance rent is any amount you receive before the period that it covers. Cancellation of lease payments If a tenant pays you to cancel a lease, this money is also considered rental income, and must be reported in the year you receive it. Expenses paid by tenants You must include income, any expenses p...