Tax Question For Mom & Pop Landlords Who Have Done A Tenant Buyout

Where did you bury or reflect the money spent to buy out your tenant on Schedule E? I will be seeing my IRS buddy for his opinion but was just wondering. Did you net it against rent earned from tenant or literally just called it a separate tenant buyout expense (since not illegal)?

Call it income, and make the fucker pay tax on it

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Come on @Elt1, SHE was actually helpful by taking a relatively small amount and I got a Sec 8 tenant to amicably leave…

Is it just a legal expense to you? You need to report full rent income and also report a legal expense for buyout. If you report a rent income (real gross rent - buyout amount), you’ll be in big trouble.

Your tax return has no impact on tenant. It’s her responsibility to decide how she reports tax

If poor people actually paid income tax they might not vote for all the “free” stuff…paying tenants to leave is wrong…If they receive income it should be taxed

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Professional services?


It’s not the tenant’s fault. The fault is with the big liberals and their politicians, judges and social workers. I would be willing to pay the tenant with my tax money and leave the politicians starving.

But buyout money is just like a legal settlement or judgement. Where do you report a legal settlement or judgement? What category of expenses is that?

Big liberals are destroying the world and humanity

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The tenants are at fault they voted for the liberals in power.
And all the anti landlord laws. This is class warefare. And the owner class is losing.

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If big liberals don’t exist, tenants would vote for better people. Tenants were misled by them, so it’s big liberal’s fault


Well, she was considering it since her daughter is out of state. I just made her decision easier. And besides, aren’t you the big bad landlord/developer? Don’t tell me you are squeaky clean…

I have no moral issue with it. But personally I would rather give money to my lawyer, he is my friend and earns his money.
I already posted about my friend evicting Latinos being accused of being racist. And their lawyer trying to extort $16k . He said fine if you pay half. Of course she declined.
Tenants that are extortionist should be challenged in court.

No, mine was a semi meeting of the minds. She didn’t have all that money to move everything OOS so my payout helps her with that. No harm, no foul…

You go to do what got to do. Doing your own management has a downside. Once you like your tenants you become their dad. I have two under market tenants, 30% below. 7k a year discount. Probably have to sell the building to get rid of them. Don’t want to be the bad guy.
I have a friend who owns a bunch of property. She tells her tenants she is just the manager. She tells her tenants the real owner is a Russian gangster. If they become nasty. She just has to threaten to call the mobster… works for her

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Well, I am leaving Oakland to you, @manch and @caiguycaiguy to conquer… Time to downsize and have less tenant responsibilities. Last night at diinner, my wifey and I were already thinking about how to redo the exchange property once we move in in a few years. I am thinking a built in brick/stone barbecue instead of a fancy stand-alone bought version. The kitchen is going to be grand. My wife is gonna get some sweet toys, like extra wide commercial stove and a large wet island. Seller better not back out somehow out of the contract now…

I don’t think there’s any drawback to the latter over the former. Meaning calling the buyout out as a separate business expense ultimately nets against total business rental income right?

Ok, happened to talk to IRS buddy and he finally got an answer for this question at least. So, he says the proper way of treating the tenant buyout is to report it under Other as Miscellaneous Eviction Costs. Hey, cost of doing business…

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Don’t forget to 1099 the tenants