It’s that time again, time for end of the year reports and forms. Below are some terms we commonly get asked what they mean, how it was calculated so we thought we would share it with everyone to hopefully answer any questions you may have.

Pre-paid rent: what exactly is this? It is advance rent that your tenant pays prior to it being due. The most common instance of this happening is when a tenant pays January rent early in December. While it is great that you have an early paying tenant, it will bring up questions when it comes time to file taxes. For one, when you get your end of year cash flow report from Fort Property Management, you will look at income, expense and then scroll down to other items. Any pre-paid rent will be listed under this category. Then when you receive your 1099, the amount will reflect the total of income and any pre-paid rent, as pre-paid rent is taxable income to you in the year it was received not the year in which it was disbursed.

Hopefully, this helps and if you have any questions on this, please don't hesitate to reach out to us and we can discuss things further. Thank you and happy new year!