On a lease to own, amount goes into their eventual down payment, do I need to claim the amount that doesn't go into (escrow) as wages/income?

shirl75 — Sat, 01 Jun 2019 01:44:36 GMT

Yes, you should report the "rent" portion of the payment...

PatriciaV — Sat, 01 Jun 2019 01:44:37 GMT

Yes, you should report the "rent" portion of the payment on your taxes. The escrow portion of the monthly payment will factor into your capital gains when you sell the property.

For example, if they pay $1000 a month and $700 of that is considered rent and $300 goes towards the down-payment, then you claim $700 as rental income on your taxes. The $300 comes to play when they exercise their option and actually purchase the property.

You can report this activity under Wages & Income >> Rental Properties. Please follow the instructions below for entering income, expenses, and capital assets (building and improvements). The capital asset section will calculate depreciation expense for you based on the information you enter. You will need this information when you eventually complete the sale.

Where do I enter income and expenses from a rental property?

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On a lease to own, amount goes into their eventual down payment, do I need to claim the amount that doesn't go into (escrow) as wages/income?

Yes, you should report the "rent" portion of the payment...