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My end of year statement doesn’t match my 1099

People often ask why the 1099 shows a different income than was sent to them by us during the year. This is because the IRS classifies management companies very similar to a payment processor such as PayPal. All income received by us is considered income to the owner.  Your gross income received in the statement should match the income received showing on the 1099.
However the year end statement will also show your expenses which you can give to your tax person to deduct from your gross income.
Prepayments on the part of the tenant are typically the reason the gross income on your end of year statement doesn’t show the same income as what is showing on your 1099. So if the tenant made a payment for 1/1/2018 on 112/15/2017 then you will see that as income on your 1099 because of IRS rules however software accounting rules dictate that income show available to you on the day that the rent is charged to tenant which is 1/1/2018.  This same effect could cause rent to not show that was paid in previous year or extra rent for the next year to show in the totals for the 1099.
Updated on February 8, 2019

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