Rental payment on 2022 1099-MISC but not received until 2023

[SRDAXI]

We received a 1099 from the company that manages our rental property.  The 1099 includes a payment made by the tenant to the management company in December 2022. However, we ourselves did not get this payment until January 2023.  (It shows up in our cash flow statement from the property management company for 2023.) The property manageer says they must include this payment on the 1099 since it was sent to them in 2022.  We calculate our taxes on a cash basis.  Since this payment is on the 1099 but not on our cash flow statement how should it be handled in our taxes? Should this payment be included as 2022 income or 2023 income?  Thanks!

[DavidD66 · Accepted solution]

You can show it as 2022 or 2023.  If you show it as 2022, you have nothing to do other than report the 1099-MISC as reported.  If you want to shift it to 2023, then enter a rental expense for the amount you didn't receive until 2023.  You can call it payment in transit, or rent received in 2023.  Just make sure you remember to report it in 2023 if you don't include in 2022.

[pk]

@SRDAXI  for tax purposes , your management company is a pass through -- your agreement is between the renter and you as the landlord and the management entity is employed by you and acts on your behalf.  It received the rent on your behalf  and for the  year 2022.  Thus you must recognize the rental income in 2022.   The cash-flow  statement or similar  accounting statement is between you and your employee ( prop. management).  Also note that the 1099-misc as it stands  is the document IRS will go by and that says you must recognize the  Dec 2022 rent  -- your agent received it .