Prorated rent collected at closing- tax question

[Kelly N.]

Hi,

We closed on our first rental property last month and had prorated rents deducted from our closing costs. The amount deducted is considered rental income, right?

Thanks,
Kelly

[Jon Holdman]

So, Bill Gulley I read Kelly N.'s post that they were the buyer. They closed mid-month. The seller had already collected the month's rent from the tenant. Kelly had a credit on the HUD-1 for the rent from the settlement date to the end of the month. That amount (as you say) is income.

I don't see any mention of deposits, but assume there was a credit for those, too.