Is Rent income collected by Property Manager included in the Gross income

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A property manager had requested the IRS to determine whether the property manager should included rental income collected on behalf of the landlords in the gross income of the property manager. IRS  in a detailed letter answered the dilemma of the property manager. According to the IRS, the property manager will collect or receive all payments made by tenants and required under tenant leases. All amounts collected by the Property Manager will be deposited in a local depository account (the “Collection Account.”)  Amounts due under tenant leases or otherwise collected by the Property Manager must deposited into the Collection Account and will not be included in the gross income of property manager.

Here is the IRS letter which explains in detail about rental income inclusion.

http://www.trexglobal.com/property-management/rental-tax-deductions/irs-letter-ruling-guides-property-manager-on-how-to-handle-rental-income-for-his-income-taxes

This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Is Rent income collected by Property Manager included in the Gross income is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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