topic Rental Income in Investors & landlords

Rental Income

Tigermaple01 — Sat, 18 Jan 2025 13:52:04 GMT

My rental property was sold in 2020. I was finally able to locate previous tenant to have the court garnish wages for back rent owed. Where is this business/rental income reported 4 years after property has already been sold?

Re: Rental Income

Shannon B1 — Sun, 19 Jan 2025 17:54:13 GMT

You will report the court garnish wages for back rent owed as Other Income on line 8 of Schedule 1.

It is not considered business/rental income because you no longer own the property.

As per this TurboTax Help Article here are the steps to enter it:

Open or continue your return.
Search for lawsuit settlement using the magnifying glass at the top right corner of the page and select the Jump to link.
Answer Yes to the question Any Other Taxable Income?
If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item.
Enter a brief description and the amount you received and select Continue.

Re: Rental Income

Tigermaple01 — Tue, 21 Jan 2025 18:14:22 GMT

Thank you for your response. I am still filing a Schedule E for other rentals, so could I still list this under additional property with the address, show the amount as rent, but have no other deductions against it? It is still business income, and still rental income, even though property is sold.

Re: Rental Income

RobertB4444 — Tue, 21 Jan 2025 19:13:15 GMT

You could do that but why would you want to? The way that @ShannonB1 has told you to enter it is taxed at the same rate and is the correct way to enter it. Your way invites the IRS to ask questions about what property that is and what's going on with it. Why invite questions?

@Tigermaple01

Re: Rental Income

Tigermaple01 — Tue, 21 Jan 2025 20:01:26 GMT

Good point. There are court costs and filing fees that I was hoping to subtract from proceeds.