In a word yes. I will be giving some generic information which is good to know. However, I am not a professional accountant and of course every situation is different. Rest assured that the government absolutely wants every penny it can and should get from taxable income.

Some Rental Income as Defined by the IRS (not verbatim)

1. Amount paid to cancel a lease- If a tenant happens to pay you to cancel their lease the calendar year that you receive the payment you are required to claim the income.

2. Advance rent- This is also considered income in the year that you receive it. For example, if you receive advance rent for 2021 in year 2020 then it is income in 2020.

3. Expenses paid by a tenant- Occasionally a landlord will have a tenant pay the landlords expenses. Although this is considered income for the landlord the expense may still be deductible.

4. Security Deposits- Security deposits are not considered income if they are returned to the tenant. All of part of the security deposit may be called income if it is not returned to the tenant. Consult your accountant for further information due to complexity.

Deductions for Rental Property

A very brief sample of deductions includes depreciation, repair costs and of course operating expenses. If you use the vacation home that also effects the tax situation. There may be limits to how many days you can use the property etc. Remember rental income is any income made from the use of or occupation of property you own and only your accountant knows your situation best.

If you have questions about anything to do with property management, we likely know the answer or can point you in the right direction. A great accountant is always worth the money and so is a great property management company. We hope this cleared up some questions as to what rental income is taxable.