Internal Revenue Service United States Department of the Treasury
Level Basic Intermediate Advanced Military International

Income — Rental and Schedules K-1

Rental Income and Expenses

Rental Income (continued)

Case Study (continued)

If LaDonna received $5,000 for the first year's rent and $5,000 as the last year's rent in advance, you must include the entire $10,000 as rental income, because she received the entire amount in the tax year.

The second $5,000 payment is included in income because it is advance rent and not a security deposit.

LaDonna.