Condo Fees and Rental Property insurance deduction mechanics

USA Discussion in 'Businesses / Corporations' started by mlewisneedshelp, Nov 8, 2018.

  1. mlewisneedshelp

    mlewisneedshelp

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    Hello,

    Last year I bought my first rental property. It is a condo and my tenants are long-term. I have two bills that are paid annually: rental property insurance and the condo association fees. While those two bills are paid annually, they do not directly coincide with the tax year....so my question is...can I deduct the full amount this calendar year or should I prorate the deduction for just this year?

    Example:

    Check 1008 of $360 paid my insurance premium running from June 18 to June 19....Do I deduct all $360 this tax year (2018)?

    Thanks!
     
    mlewisneedshelp, Nov 8, 2018
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  2. mlewisneedshelp

    AGH the CPA

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    depends on whether you are cash basis or accrual basis business.

    cash basis, yes.

    accrual basis the proper thing to do would be to record a prepaid insurance account for the 2019 portion.
     
    AGH the CPA, Nov 30, 2018
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