Pre-paid rent counted twice

[um]

Hello,

My property manager received pre-paid rent for Jan 2024 in Dec. 2023 and reported it with my MISC-1099 for 2023 (i.e. the tenant paid Jan 2024 rent in 2023 which was included with my 2023 MISC-1099). But then, the property manager did NOT reduce the 2024 reported income by the amount that was already reported as income to me in 2023. So the Jan 2024 rent was reported to me twice: once as pre-paid included in the MISC 1099 in 2023 and now again as regular rent with the 2024 MISC 1099. The same thing is happening again, as I already have pre-paid rent for 2025 included in my 2024 MISC-1099.

How do I offset that. My property manager says that it must be reported when it was received, but that should then reduce my income for 2024 - otherwise that amount is counted double.

Any help is appreciated.

[DianeW777 · Accepted solution]

It depends. Income is included in the tax year it is actually received so your 2023 return is correct as is, including the prepaid rent.  

You have two options for handling the duplicated rent for 2024.  

1. Enter the total amount of income from the 1099-MISC and take a miscellaneous expense for the duplicated rental income.
2. Enter the actual rent received as the total income from the 1099-MISC.  Keep notes in your tax file for future reference should you need it.

My advice would be number 2. The property manager should correct the 1099-MISC, however you can make the adjustment yourself as indicated above.

[um]

Thank you, DianeW777, for your quick and detailed answer.