Tax Deductible??

[Mike McKinzie]

I did something new this year. I had a prospective tenant offer to lease a rental house I own if I would buy out their current lease. The cost of the buy out was very close to one month's rent on my rental, so it was about the same as giving one month of free rent which I have done on several other rentals in the past 18 months. So I did it. Now, is the cost of buying out their lease a rental expense for me?

[Account Closed]

Mike this is certainly a legitimate rental expense. Consider it part of the cost of turning a unit or placing a tenant. I believe that it would pass the test of being ordinary and reasonable. While not a common situation it is not an uncommon real estate practice and the expense is reasonable.