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1) If the contract says it is a non-refundable security deposit will be automatically applied to the last months rent, yes, you need to claim it. If not, no, you don't claim it until it becomes non-refundable (it is actually applied against damages).
2) Did the management company receive it in 2016? If so, yes, it goes on your 2016 tax return (it is constructively received because they are your "agent"). If not, it goes on the 2017 tax return.
1) If the contract says it is a non-refundable security deposit will be automatically applied to the last months rent, yes, you need to claim it. If not, no, you don't claim it until it becomes non-refundable (it is actually applied against damages).
2) Did the management company receive it in 2016? If so, yes, it goes on your 2016 tax return (it is constructively received because they are your "agent"). If not, it goes on the 2017 tax return.
1. No don't report it - Security deposits that are held to insure good behavior by the tenant are not income unless forfeited.
2. Also no. You are a "cash basis taxpayer". You only report income in the year you receive it and expenses in the year you disburse the funds.
Since your "agent" reported received the December rent in 2016 you have to include that in income. The security deposit is not included in income unless at some point in the future it's determined that you are not going to return it.
If it was received with the understanding that it was the final month's rent then it does have to be included in income.
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