topic Is apartment rental concession taxable? in Investors & landlords

Is apartment rental concession taxable?

Elnaz — Thu, 05 Nov 2020 23:43:21 GMT

Hello,

A lot of NYC apartment rentals are offering bonuses due to covid19 and the slow market but are these bonuses taxable?

The apartment I’m interested in is offering a 12k signing bonus for a one year apartment lease. This bonus will be wired to my bank. (The rent is $3k per month but they advertised the rent to be $2k per month. They say they’ll wire me 12k in the beginning and then I have to pay $3k rent each month)

Do I have to report this $12k in my tax return? I’m basically giving back the money they’re giving me.

I’d appreciate your help.

Thanks

Re: Is apartment rental concession taxable?

Opus 17 — Fri, 06 Nov 2020 21:16:52 GMT

No, its a discount on your rent, not income to you.

However, if you were claiming some tax benefit based on your rent (like a home office deduction for one bedroom), you would base it on the net rent and not the nominal rent.

Re: Is apartment rental concession taxable?

Carl — Fri, 06 Nov 2020 22:56:34 GMT

They say they’ll wire me 12k in the beginning and then I have to pay $3k rent each month

Make sure your rental contract specifically states the rent is $3K a month and nothing less. Also read the contract for what your liabilities are for early termination. Generally, a rental contract is where you agree to pay rent for an entire year (or whatever the time period is) with payments due in installments (usually monthly). So legally speaking you are obligated to pay a total of $36,000 for a year's rent - but payable in monthly installments of $3,000 a month. So if you move out after say, 2 months, you are still obligated legally to pay the full $36,000.

If you are military subject to change of station due to PCS orders, ensure there's a military clause in the contract, and that what happens with your rebate is clearly spelled out.