prepaid rent tax treatment

[Michinori Kaneko]

Hi All,

I know that when you receive a prepaid rent, you treat that as an income on the year that you receive it.  However, what if you use the property manager, and they are the ones that receive the prepaid rent and I do not see that money in my bank account until the following year? Is that still treated as me receiving a prepaid rent and taxable in the year that tenant paid it? Thanks for your help in advance!

[Nicholas Aiola]

@Michinori Kaneko The property manager is receiving the rent on your behalf, so it as if you received it when they did. Assuming the cash basis is being used, you would report prepaid rent in the year it was received (including received by the PM).