I rented out my house for the first three months of 2022 then sold it but my tenant didn't pay the rent that was owed. How can I account for the rent that was never paid?

Forum|Forum|3 years ago
March 2, 2023
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I rented out my house for the first three months of 2022, but my tenant didn't pay the rent that was owed - thus incurring me negative income. I then sold the house for a profit at the end of March. I have entered the house sale appropriately, but TurboTax won't let me enter a negative income for the rental property. How can I account for the rent that was never paid?

TurboTax Premier Online

Best answer by MAK70

If you are a cash taxpayer, you cannot claim unpaid rent basically because you never claimed it as income. (In contrast to a accrual taxpayer- they report the income when it is earned not received, so they would have to report the income when the rent is due. Because they may have to pay tax on that income, if it does not get paid, when they cannot collect they can deduct it as bad debt to cancel out the income.)

MAK70Answer

Carl11_2

Employee

You can't claim as a loss, that which you were never paid, never reported, and never got taxed on in the first place. You'll just report a rental income of ZERO for the year, and press on.