topic 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? in Investors & landlords

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?

WW2262 — Tue, 04 Jun 2019 22:54:56 GMT

MichaelL1 — Tue, 04 Jun 2019 22:54:57 GMT

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

WW2262 — Tue, 04 Jun 2019 22:54:59 GMT

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

MichaelL1 — Tue, 04 Jun 2019 22:55:00 GMT

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 — Tue, 04 Jun 2019 22:55:01 GMT

Excellent and prompt reply. Thank you you very much!