RE: rent credits - Posted by Brian

Posted by JPiper on November 26, 2000 at 22:02:07:

I treat initial option consideration in a similar fashion as a security deposit. I carry it as a current liability on my books, and don’t pay tax until it either expires or is exercised. There’s not much to tracking this since it’s a single entry.


RE: rent credits - Posted by Brian

Posted by Brian on November 26, 2000 at 11:38:14:

Are rent credits taxable during the term of a lease/options?

Re: RE: rent credits - Posted by JPiper

Posted by JPiper on November 26, 2000 at 14:06:44:

Assuming that your “rent credits” are termed “option consideration” then they would be non-taxable until such time as the option either is exercised or expires. Personally, I pay tax on the entire rent as I receive it…cuts down on the bookkeeping.


taxes and bookkeeping - Posted by leslie

Posted by leslie on November 26, 2000 at 15:30:06:

I like that answer. So much bookkeeping in the name of tax reduction gets counter productive.
It takes time to save, document, and mentally defend “every little receipt”. I’m talking about the gas, meals, lawnmower, and home office stuff. In less time I can go buy one more house to depreciate and have a “solid deduction”.

My question to you is regarding the “up front” money, the initial option consideration. Do you also lump it into the received and taxable pile, or is it tracked until the end of option? I don’t mean to pry, just curious. I like to hear about ideas to simplify.
I don’t mean we should throw out the baby with the bath water, but I like to hear the ideas.