How Is My 1099 Income Calculated?

Your IRS Form 1099 reflects the total gross income collected for your rental property during the calendar year, plus or minus any change in prepaid tenant rent from the prior year.

1. Gross Income

"Gross income" includes all rent and other tenant payments collected on your behalf before any expenses are deducted. This number will typically be higher than your actual payouts, which are shown as Owner Distributions.

To compare, check the line labeled “Owner Distribution/Draw” in the Other Items section at the bottom of your Cash Flow Statement.

2. Total Operating Income

Your total operating income includes:

• Rent (including pet rent)

• Tenant reimbursements for Owner-paid expenses

These items appear under the “OTHER OWNER OPERATING INCOME [Paid by TENANT/OTHER]” section of your Cash Flow Statement.

3. Prepaid Rent

When a tenant pays rent in advance (for example, December payment for January rent), the funds are held until the corresponding rent charge becomes due.

You’ll find this amount in the Other Items section of your Cash Flow Statement, labeled: “PREPAID TENANT FUNDS (held until charges due).”

• A positive prepaid rent amount increases your total reported income for the year.

• The same amount will appear as a negative adjustment (income reduction) in the following year, to avoid double-reporting.