Hello,
I have two apartments and keep the power in my name so if I have a flaky renter and they don't pay the power bill the power won't be turned off and my pipes won't freeze. Anyway, I bill the individual tenants their bill each month after I pay the full amount. They reimburse me. Do I include this in "rental payments" on the Schedule E worksheet? Or somewhere else? Thanks in advance for any assistance.
I would just include it with the rent. An alternative would be to enter it as a contra (negative) utility expense, but the bottom line will be the same either way.
Thank you for your prompt response! I have listed the power bills as an expense to me, so I will include the payments as a portion of the rent. I had a renter "bail" and fail to reimburse me when they moved out suddenly... so maybe that will show that portion as a "loss"... or added expense.
You are on a cash basis and therefore, the loss of rent due a tenant leaving without paying cannot be deducted on your return.
The following are examples of business bad debts (if previously included in income):
Yes, the reimbursements should be listed as income, and the schedule E only has one line for rental payments (income).
You would also deduct the actual amount you paid to the power company as well, for example, utilities expense.