Claiming Rent money as ( Income ) ... how soon ?

[Michael Dunn]

Good Afternoon,

I have a situation that I'm sure is not all to common , which is a bot why I'm confused as to what to do / my options are

A quick rundown of the scenario at hand .....

The property I have is a " second unit "  that is attached to the main house by the Roof line only.

This unit is currently being rented for $500 a month

So once I close and take ownership of the property, I will have a Renter already in place that will be paying me $500 a month.

My note on the Property is looking to come in right around $525

My question is ..... How soon after I close and take ownership of the property, will I be able to claim this $500 rent money as Income , so that I can show it on my taxes as " Earned Income " and thus use it to pay my own personal note on the house of $525 per month ?

My main reason for wanting to know is , that this $500 in rent $ , will basically pay the house note for me ( of $525 ) , and I will need to show on my taxes that this is the case , as I don't want to effect my DTI negatively by having a now new $525 monthly bill, while my Income from my work will stay the same in 2016 .

If I can show that I am receiving this $500 in rent,, it will basically be a wash, and won't effect my DTI , and will allow me to qualify (Income wise ) in the purchase of an Investment property come the end of 2016

All comments and input is much appreciated - Thanks

[Dawn Anastasi]

Originally posted by @Michael Henry:

 Unfortunately, security deposit supposed to deposited in an interest bearing account in Milwaukee, WI; it is a State issue not a local one. It is not enforced by the tenant because most tenant don't know. And the fact that interest rates are low it is kind of a moot point. 

Where are you getting the source for your statement?

I am referencing the Wisconsin Department of Trade and Consumer Protection Website which states "State law does not require payment of interest on security deposits."

Landlord-tenant relations in Wisconsin are regulated by Chapter 704, Wisconsin Statutes, and by Chapter ATCP 134, Wis. Adm. Code.  If you can find anything in either of those documents stating that security deposits are supposed to be in a separate, interest-bearing account, please let me know.