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Bearynice
February 8, 2023
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Rental Expense

  • February 8, 2023
  • 1 reply
  • 0 views

We have a management company for our mountain vacation home rental property. Our property was reserved and to be rented for a 5 night rental between Christmas and New Years. Holidays are rented at higher rates. Our resort had to shut down during the extreme cold weather due to a leak in a frozen water tower and frozen water lines throughout the resort. The management company canceled all incoming reservations. Can we use the portion of the rental fee that we would normally get and were supposed to get as an expense? We did lose out on this income.

    Best answer by AnnetteB6

    No, you cannot claim a deduction for income that was never received.  

     

    Instead, your total income for the year will simply be lower than it would have been.  The end result will be that your overall rental income will be lower and therefore less of a taxable impact on your return.  If any expenses were paid by you as a result of the water issues in the resort, then those would be deductible even though renters were not in the property at that time.  

     

     

    1 reply

    A
    AnnetteB6Answer
    February 8, 2023

    No, you cannot claim a deduction for income that was never received.  

     

    Instead, your total income for the year will simply be lower than it would have been.  The end result will be that your overall rental income will be lower and therefore less of a taxable impact on your return.  If any expenses were paid by you as a result of the water issues in the resort, then those would be deductible even though renters were not in the property at that time.  

     

     

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