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quietpro
New Member

Are late rent payments (2016 rent paid after Dec 31) taxable for 2016 or 2017?

Attempting to clarify is rent is taxable when owed or when paid.
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Heather14
New Member

Are late rent payments (2016 rent paid after Dec 31) taxable for 2016 or 2017?

When you report rental income on your tax return generally depends on whether you are a cash or an accrual basis taxpayer.  Most individuals operate on a cash basis, which means they count their rental income as income when they actually or constructively receive it, and deduct their expenses when they pay them. If you operate on a cash basis, you would report the rent payment when it is paid. Also, keep in mind that if you're a cash basis taxpayer, you can't deduct uncollected rents as an expense because you haven't included those rents in income.  

If you are an accrual basis taxpayer, you generally report income when you earn it, rather than when you receive it. You generally deduct your expenses when you incur them, rather than when you pay them. 

You can see the following IRS link for more information: https://www.irs.gov/publications/p527/ch01.html

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1 Reply
Heather14
New Member

Are late rent payments (2016 rent paid after Dec 31) taxable for 2016 or 2017?

When you report rental income on your tax return generally depends on whether you are a cash or an accrual basis taxpayer.  Most individuals operate on a cash basis, which means they count their rental income as income when they actually or constructively receive it, and deduct their expenses when they pay them. If you operate on a cash basis, you would report the rent payment when it is paid. Also, keep in mind that if you're a cash basis taxpayer, you can't deduct uncollected rents as an expense because you haven't included those rents in income.  

If you are an accrual basis taxpayer, you generally report income when you earn it, rather than when you receive it. You generally deduct your expenses when you incur them, rather than when you pay them. 

You can see the following IRS link for more information: https://www.irs.gov/publications/p527/ch01.html

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