Question

marty is skilled at finding and purchasing property at sub market prices. he rarely owns these properties for more than a few months as he prefers to make a few upgrades and then sells them at a profit. occassionally marty buys a property with a tenant in redidence from who he receives rent. how does marty report this rental income

Answer 1

Renttal income to be condsidered in federal tax return after deducting assciated expenses.
Taxpayer can choose cash basis or accrual basis. If choosing cash basis, rent actually receive
to be taken in return and deduction of expenses when paid. If you use accrual method, report
income when earn instead when received and deduct expenses when accrued instead paid.
As in this case, marty having partly share in property rent income shall be partly reported
in return. Any expenses also shall be accordingly partly deductible.