2006 or 2007 income?

[QuestionGuy101]

What is the name of your state? California

The rent of a tenant was due on December 29, 2006. The tenant had the rent ready to be picked up by the landlord on that day (12/29/2006). But the landlord was busy and he didn't pick up the rent until January 2 2007.

Is the rent payment considered 2006 or 2007 income of the landlord?

[seniorjudge]

Q: Is the rent payment considered 2006 or 2007 income of the landlord?

A: The landlord was busy and he didn't pick up the rent until January 2 2007.

[abezon]

If the lease states that the landlord was supposed to pick up rent whenever tenant called, then the rent was constructively received on 12/29. That was when L had the right to receive & control the money. Just as depositing a 12/27 paycheck on 1/2 does not convert the money into next year's income, so picking up the check in January does not convert the rent into January income. HOWEVER, the lease could change this answer, if it required L to wait until the first to pick up rent checks. In that case, L didn't have the right to the money even though he knew he could go get it.

On the other hand, how the heck is the IRS going to know unless L opens his big mouth? And how much difference will it make anyway?

[LdiJ]

Originally Posted by QuestionGuy101

What is the name of your state? California

The rent of a tenant was due on December 29, 2006. The tenant had the rent ready to be picked up by the landlord on that day (12/29/2006). But the landlord was busy and he didn't pick up the rent until January 2 2007.

Is the rent payment considered 2006 or 2007 income of the landlord?

Its called "constructive receipt". The money was available for the landlord and the landlord chose not to pick it up. Its 2006 income. Had the tenant mailed it and the landlord didn't receive it until 1/2/07, it would be 2007 income.