LindaB1993
Expert Alumni

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Landlords with over a certain number of rental units are obligated in most locales to pay interest on the deposits to tenants each year. 

 

Since the interest earned is claimed as income by the landlord, such paid interest is usually tax deductible as an expense.

 

When all or part of the security deposit is taken for rent or repairs, it becomes income to the landlord. 

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