A security deposit is not included in rental income when received if you plan to return it to the tenant at the end of the lease.
Rental Income And Expense Worksheet - 2021 - CPA Clinics
If this is your first year with our firm, please provide a depreciation schedule for all property placed in service in prior years.
A security deposit is not included in rental income when received if you plan to return it to the tenant at the end of the lease. If any amount is kept during the year because the tenant did not live up to the terms of the lease, include that amount as rental income. If an amount called a security deposit is to be used as a final payment of rent, it is advance rent and is included as income in the year received.
Note: Individual states have laws requiring payment of interest by property owners who hold security deposits of tenants. Check state laws for more information.
