If the security deposits are a liability, why are they sometimes included in the total income?

Answer 1

If you claim something like that as income, then you can claim the loss of it as an expense. Spending it on repairs and refunding the remainder to the tenant both should be considered expenses if it was originally considered income. Also, you may have someone move out quickly thinking they have lots of damage, but after repairs there is a portion left over that they never request back. Then that portion that the landlord keeps free and clear should rightfully be considered income.

Some states (like California) require that Security Deposits be kept in a separate account and not co-mingled with the business funds. In that case, no expenses & no income (except any interest gained from the bank). When someone moves out, those states require that you track them down within reason and give them any amount they are due without their need to request it. Yes, it's a pain but a landlord can't keep it.

Answer 2

That is probably because most landlords not aware of the error, count intake for security deposit as positive income. It is neith income nor expense. It is held as a short term liability and should be recorded as search in the books. Once the lease expires and the land lord must make repairs for damage caused to the tenant, the deposit is then expensed for repairs.....and the balance if any, is paid out to the exiting tenant.

Answer 3

I stay IN MISSOURI, IN LOW earnings FOR SENIORS OR DISABLED. i'm DISABLED, I had to PAY A DEPOIST NO UTILITES blanketed PLUS loose CABLE. THEY BASE IT on your earnings & IN would MY hire is going DOWN 2.00..