Rental Property Investor · League City, TX · Member since 2014 · 4 posts · 1 vote
After collecting tenant pass-throughs for the year, do you pay the property taxes at the end of the year or the beginning of the next year?
The benefit of paying the following year is the interest income accrued. However, when you do the annual reconciliation, the property taxes would not show in the current year. How do you typically handle this?
Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
1y
I am paying the property tax bill when it comes due, so that is what shows up on my statement. You'll invoice the tenants on whatever strategy you set up in their leases. For me, it all gets trued up after the first of the year. There's an invoice for what's due in NNN reimbursements and then income to pay it.
Make sure you read your lease. You want to look for words such as cash basis, accrual basis, or U.S. GAAP. If it is accrual, then when you actually make the payment does not matter.