I owned a rental property in 2016 that the tenant caused damage to when he lived there. A portion of the cost for repairing the damages were paid by his rental deposit but there is a substantial cost for repairs that he still owes but has not paid (and has refused to pay so far). I have hired a collection agency to collect the balance owed from the tenant.
I have a couple of questions.
1. Let's say the balance is $X. Can I deduct $X as repair expenses for the rental property since the repair cost has been paid for by me , the landlord.
2. Lets say the collection agency manages to get the payment from the tenant in 2017. Will I then just report the collection amount (minus the 50% charges of the collection agency) as income for the year 2017?
