PM refuses to log tenant reimbursement properly

[Daria B.]

The PM refuses to log the utility reimbursement from tenant properly, is this really a big deal?

I pay the utility directly, for reasons of ensuring it gets paid and is not the issue here.

The tenants receive a bill copy of the utility and they pay that to the PM who turns it around to me. 

This is a new PM I have and they, unlike previous PMs, are listing this under “rental” and showing it lumped into the 1099. I asked them to correct this and they refuse giving me some lame answer. 

My CPA says don’t worry it will balance out by setting the expense against it and it’s a wash. (my words and description not his)

I have never expensed the utility because the tenant has always reimbursed me. But now I need to save this and give the amount to the CPA.

I am concerned that it shows, however small, that the rental income is more than what was actually collected.

Is this really an issue for me, IRS? I don’t believe it’s proper bookkeeping. I did some research and found several articles that speak of the same situation where I am paying and get reimbursed from tenant clearly showing it’s utility and not income.

[Daria B.]

Quote from @Bill B.:

This is a 2 minute fix for your cpa and something you’re tracking anyway to make sure you get reimbursed. It’s probably their software as my PM includes every dollar they pay me on the1099. I use quicken to track rental income and expenses anyway so I know how each property is performing and if they have paid back utilities I bill them. It’s been a non-issue for my CPA as I simply report my actual rental income per property and he adjusts the numbers. 

 Thanks @Bill B.

I was hoping someone in the same situation could tell me what they were doing. Although I spoke with the CPA I also want to find out if this was normal bookkeeping.