Can you write off uncollected rent when a deadbeat tenant doesn’t pay?

Murry Bradford of the Bradford Tax Institute was recently asked this questions and answered thusly:


Bummer, huh?  Not really.  As Bradford explained, since you never declared the income of that unpaid rent, you can’t write off that which you never got.  Makes sense, really.

You can still claim the depreciation deductions and write off expenses for maintenance, etc.  That’s better than nothing, right?

But be careful, Murry explained.  If you under-rent a property, you might run afoul of IRC 280A which could make that rental property a “personal residence” for the less-than-fair-rental amounts.  If that happens you can lose those deductions!

If you’ve questions, contact your tax advisor.