Question:I sold a property in 2006, but an ex-tenant still owed
me back rent. They have continued to pay me monthly.
For my 2006 taxes I will list all rent income from the
property, including these back rent payments.
For my 2007 taxes how do I handle this. Do I still list
the income on Schedule E and report it as coming
from the sold property?
It would seem strange to have income from a
schedule E property that no longer exists.
Answer:You would still report the rent on Schedule E. Rental income is usually on the cash basis, and taxable in the year of receipt, even if the property has been sold.