Collecting rent through option agreement

[Jacob Budzynski]

I have an option agreement to buy on a triplex. I gave the seller a down payment on the option, I also keep the rental income from the property in return paying the seller a monthly payment. My question is, since I am not on the deed do I pay the taxes on the income of the property?

[Joe Villeneuve]

This is the wildest, most twisted deal (if you understand what you have correctly) I have ever come across...yet.

Let me see if I got this right:

1 - You paid a "down payment" on an option.  How do you do that?  You either buy the option, or you have a Land contract.  There are no Down Payments on Options.  The Option Contract is just that...a contract that gives you the right to buy the property for a said amount within a period of time.  The Option Consideration you pay, is 100% of the cost of that "Option Contract"....and can't (shouldn't) be credited towards the actual purchase of the property...when the option agreement is executed.

2 - You keep the rental money from a property you have no ownership or control of?  How?  Why?...More important...Where do I sign up for this?

3 - The answer the the last question as an easy one.  Yes.  You pay taxes on the income because it is income.  It has nothing to do with how you get it.... as strange as that might might be.