Income that Landlords Receive Taxable

Not all money received by a landlord is table. There are certain types of payments that will not be considered income. First start by asking what what types of rent payment did you receive in 2014?

 

Advanced Rent

Advance rent is any amount you receive before the period that it covers.

This information is found in Publication 527, Residential Rental Property.

 

Lease Cancellation

If your tenant pays you to cancel a lease, the amount you receive is rent.

This information is found in Publication 527, Residential Rental Property.

 

Security Deposit

Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year.

If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. Include it in your income when you receive it.

This information is found in Publication 527, Residential Rental Property.

 

Services

If you receive property or services as rent, instead of money, include the fair market value of the property or services in your rental income.

This information is found in Publication 527, Residential Rental Property.

 

Tenant Paid Expenses

If your tenant pays any of your expenses, those payments are rental income. Because you are including this amount in income, you can also deduct the expenses if they are deductible rental expenses.

This information is found in Publication 527, Residential Rental Property.

 

Personal Use of Rental Property

A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons.

  1. You or any other person who owns an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement.
  2. A member of your family or a member of the family of any other person who owns an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.).
  3. Anyone under an arrangement that lets you use some other dwelling unit.
  4. Anyone at less than a fair rental price.