Bought condo in 2016 and sold it in 2018. There was prepaid rent for one year at closing in 2016. How is it handled in computing cost basis?

[MichaelL1]

Prepaid rent --was that added as rental income in 2016?  

[WW2262]

Yes, 3 months were on my 2016 Schedule E and the other 9 months on the 2017 Schedule E.

[MichaelL1 · Accepted solution]

The amount of the prepaid rent was reported as income in 2016 and 2017, on the rental.

This cost was added to sales price when you purchased the condo, so that would be added to the basis or cost of the condo when purchased. 

[WW2262]

Excellent and prompt reply.  Thank you you very much!