But she sent me a 1099 for the amount she paid me.The property management company kept the tenants security deposit and 1/2 the first month’s rent.

It maybe that the seller does not want to pay the deposits that are required or that there are bills attached to the account he does not want to pay. 

@Keaton Edwards Slightly below market rent, incentive programs like first month rent free or moving cost paid, low or no deposits.

We can cancel the deal and get all of our deposits back plus interest.

I would suggest maybe asking for the highest allowable security deposit that your state allows, just as everything is new and should be in excellent repair still I'll include a link too that may be of some use- in conjunction with current Zillow, Realtor.com, etc. listings in your area https://www.rentometer.com/Hope that helps some

@Michael Lettieri You still have their security deposit, right?

Namely, when using a 3rd party property management company, do I need to account for the tenant security deposit on *my* balance sheet?

The only thing we did in person was show the house and collect the security deposit and first months rent(in cash) and give them the keys.Seems to be working smoothly so far.....

Stimulus money has already been direct deposited in most people's accounts.

If the net amount that the insurance company is offering covers the costs of repairs, is there any point to go afterthe security deposit or involve the tenant's insurance company?