topic My renter was unemployed and ill the entire year of 2019 and did not pay rent. Can I deduct the rent as a loss? in Investors & landlords

My renter was unemployed and ill the entire year of 2019 and did not pay rent. Can I deduct the rent as a loss?

kw-r33n — Wed, 25 Mar 2020 23:45:37 GMT

Re: My renter was unemployed and ill the entire year of 2019 and did not pay rent. Can I deduct the rent as a loss?

Critter — Thu, 26 Mar 2020 00:31:38 GMT

NO. You cannot deduct income you never received ... but you do get to deduct all the expenses you incurred during the year ... along with the depreciation.

Re: My renter was unemployed and ill the entire year of 2019 and did not pay rent. Can I deduct t...

JamesG1 — Thu, 26 Mar 2020 00:33:14 GMT

Whether you can deduct the unpaid rent as a loss depends on your method of accounting for your 1040 Schedule E rental real estate activity:

If you are an accrual basis taxpayer, then you would record this on the Other expense line and just title it Bad debt.
If you are a cash basis taxpayer, then there is no bad debt because you have not previously recorded the income. income.