Answers · Bookkeeping
How to Record a Landlord Reimbursement
A refund or reimbursement usually offsets the account that originally bore the cost unless the facts support separate income or a basis adjustment.
This question is answered in full on the main page for it.
How it works
The rule, and what it turns on.
This avoids overstating both expenses and income. Capitalized costs require separate basis analysis.
Example
$2,000 repair expense followed by $500 vendor refund generally leaves net repair cost of $1,500.
Common mistakes
What we see go wrong, and what we do instead.
- Posting every refund to miscellaneous income.
A better approach
- Use a clearing account until the original cost is identified.
Authority
Where this comes from, so you can check it.
IRC §162(a) (ordinary and necessary trade or business expenses); IRC §262 (personal expenses generally nondeductible).
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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