Mynd Property Management

Creating Happy Homes and Healthy Investments

Why might I be paying taxes on “prepaid” rent for the current calendar year?

Mynd acts as an agent on behalf of the owner. “Prepaid” rent is received in a current month and later applied to a future month. By law, Mynd is required to report all income received by December 31st as income for that calendar year. When income is received in the operating account on behalf of the owner prior to midnight on January 1 of the new year, Mynd has to report it as income for the prior year. For more information, please visit https://www.irs.gov/taxtopics/tc414

In addition, the “ 40010.000 Rent” includes January 2020 rent if it was paid on or before December 31, 2019. The year end statement will deduct this amount because the prepaid rent from 12/31/2019 was already included in 2019’s 1099.