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1099-Misc Rental Income

taxu2
Level 3

Client received 1099-Misc from Property Management Company for the rental of his property. The paid box 1 rents of 11835.00 and box 3 other income of 4093.85. The box 3 was payment for deposits. Can I just include that on Sch E income not reported elsewhere? The software doesn't allow other income to be linked to Sch E. Thoughts? 

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12 Replies 12
BobKamman
Level 15

Refundable deposit?  Not yet refunded or applied to rent?  More information needed.  

taxu2
Level 3

Client advised other income was 3323.80 for an insurance claim, 371.05 was for utilities and 400.00 was for non refundable pet fee. Hope that helps. Not sure what to do with it. Thank you! 

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qbteachmt
Level 15

The insurance claim is applied to whatever got claimed against and got repaired/replaced/destroyed. You cannot write off a loss and then get reimbursed for it, and not report that exchange; or, got the value, which affects the basis. Hard to give specifics on something not identified.

The pet fee is just income. It's the same as rent, but didn't need to be reported in Box 1.

Hard to know if the utilities was a return of the landlord/owner's deposit, or some rebate from an electric coop or?

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taxu2
Level 3

Client advised is was for a utility return that he paid for. So since other income can't be linked to Sch E can I just report the pet fee income on Sch E line 3 as income not reported elsewhere? Thanks! 

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BobKamman
Level 15

I'm not sure why the pet fee is not just rental income like everything else.  Line 1 is reserved only for human fees?

taxu2
Level 3

Yes apparently line 1 is for just us humans...wait; we're not human. 

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BobKamman
Level 15

I had a client who owned a self-storage place.  I must have been doing it all wrong, I put the income on Line 1.  

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qbteachmt
Level 15

A utility deposit wasn't supposed to be reported as expense; it is an asset. Getting it back isn't income; it's a return of that deposit.

The thing to watch for is when a utility expense was deducted from the returned deposit. That part would be expense.

Example:

$300 deposit to open a new customer account.

Held for 3 months.

Returned minus the first 3 months' expense.

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taxu2
Level 3

Ok, thank you. So can I just put the other income items directly onto Sch E since it can not link it there? Or does the "other income" have to be checked other income on the 1099? Thanks, 

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sjrcpa
Level 15

Report the taxable income directly on Sch E. Bypass 1099 input.


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sjrcpa
Level 15

If the management company reported refunded utility deposits as income, might they have reported the initial disbursement as an expense?


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taxu2
Level 3

I will check. Thank you! 

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