Rental income and taxes

New
貧乏

New

貧乏
Dec 16, 2019 14 Comments

So we have a renter that for a few months paid via PayPal/Venmo/ApplePay Cash, and total rent was <20K so there was no 1099. They they paid via cashier's checks, and the bank let me encash in a way that the amount never showed up on my account. Now the bank says they have to deposit the money in the account, to maintain traceability, which makes total sense. (wondering why they realized so late)

So at what stage should I show this as rental income. The PayPal money and stuff I encashed, I have no paper trail of that money.

Now that checks are showing up periodically in my account, whats the recommended way to show this as "income". I mean there's no 1099 here, no W2. Is it totally up to me? Someone's gotta be monitoring this. OR does IRS not care about anything < 10K.

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TOP 14 Comments
  • E*Trade / Finance
    cbEV72

    Go to company page E*Trade Finance

    cbEV72
    Consider it a gift. I’m not joking
    Dec 16, 2019 6
  • NVIDIA
    giGY12

    Go to company page NVIDIA

    giGY12
    Any rental income should be reported in schedule E. Usually with property taxes, expenses and depreciation you will end up paying no tax so why not do the right thing? Also you get QBI (trump introduced this last year) tax deduction (quite substantial) with rentals that helps reduce overall tax.
    Dec 17, 2019 1
    • New
      貧乏

      New

      貧乏
      OP
      Thanks that’s helpful.
      Dec 17, 2019
  • What if IRS finds out the market rental in the area while you’ve been reporting a fraction of that amount. The recommended way is to be truthful.
    Dec 16, 2019 0
  • Amazon
    BOgI10

    Go to company page Amazon

    BOgI10
    Rental incomes are reported on Schedule E form with your 1040. But I’m not sure if one unit qualifies for someone to file Schedule E. TurboTax has a section for filing rental income.
    Dec 16, 2019 0
  • Personal finances are usually done on a cash basis, so recognize the income when you receive the payment.

    PayPal, Venmo, and ApplePay cash do have paper trails, the IRS can easily get them in an audit.

    If you are in California, renters report payments to the FTB, if you don’t report the income, they will eventually find you.

    It’s business income, there doesn’t have to be a 1099 or W2 for you to still need to pay taxes on the income.
    Dec 16, 2019 0