Rental property

[ferrrich]

Starting in December, 2021 we began periodically renting our home when we would be located in other parts of the country. We use a rental agency who pays us the “net” rental income one month after the rental month. The net rental income is the gross rents, minus their agency fee, cleaning fees and other rental expenses they incurred for the month. The rental agency will be providing a 1099 for the net rental income at the end of 2022.

We have read IRS publication 527 “Residential Rental Property”. We have many questions on this.

We did not receive the net rental income for December, 2021 until January 2022. We are assuming this net rental income will be taxable in 2022 because we did not receive it until 2022. (We also assume this because the rental agency did not provide a 1099 for 2021). Is this assumption correct?

[tagteam · Accepted solution]

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@ferrrich wrote:

....We are assuming this net rental income will be taxable in 2022 because we did not receive it until 2022. (We also assume this because the rental agency did not provide a 1099 for 2021). Is this assumption correct?

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That is technically incorrect since receipt by your agent (the rental agency) is considered receipt by you, the principal. As a result, it was improper for the agency not to issue a tax reporting statement (1099) for the 2021 tax year, assuming the amount exceeded $600.