Hello. We had one tenant who overstayed his welcome (and his lease) last year. Due to COVID-19, court closures, resulting heavy dockets, and attempts of mediation, we lost eight months of rent plus added eviction fees. Are we able to account for this on our taxes for 2020?
Accountant · Atlanta, GA · Member since 2015 · 1k+ posts · 1k+ votes
5y
If you're a cash method taxpayer, revenue not collected isn't a deduction. You're already not recognizing it as taxable income. You don't get to "double dip" by also claiming it as a deduction. If your business is on the accrual method of accounting, it's a little different.
For legal expenses and court fees, just keep track of those and give them to your tax professional.