How do I show a refund of advance rent on the tax return? I had treated initial deposit as income on prior return. Is the refund an expense or do I deduct from income?

Forum|Forum|3 years ago
March 19, 2023
2 replies
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Rental property. Tenant deposit was treated as income on my prior returns. At the end of his tenancy I gave him a refund of his deposit. How do I account for this on the tax return. Is this an expense? If so, will it come under miscellaneous expense? Or should I deduct it from total rental income?

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Best answer by ThomasM125

That should be deducted from the rent income, sort of like a return and allowance.

ThomasM125Answer

That should be deducted from the rent income, sort of like a return and allowance.

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Mike9241

unless you use a management company and get a 1099 for the gross rent. then the IRS will notice a mismatch and ask about it. in this case, I would take it as a misc deduction "rent refunded"

skalAuthor

No management company and no 1099. After ThomasM125's answer I was going to reduce my total rental income by the amount I refunded. Did I misunderstand? Should I be making adjustment under some other misc deduction heading? If so can you please clarify where in Turbotax. Thanks!