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TAX BREAKS

Is Potential Lost Rental Income Tax Deductible?

By The BIDaWIZ Team on May 7th, 2010 at 8:30 am
This is an interesting tax question and one that small business owners frequently ask. Unfortunately, you cannot claim a tax deduction for the potential lost rental income or what can best be characterized as an opportunity cost. Similarly, the IRS states in the Internal Revenue Code that lost rental income while a property is vacant is not tax deductible. So, it is just an opportunity cost in economic terms but that is about it. .
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2 Comments

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  1. Jack / March 2nd, 2012

    What about lost rental income while the property is occupied?

  2. The BIDaWIZ Team / March 2nd, 2012

    There are strict rules for meeting the definition of rental property. But, if the property is occupied and the “landlord” doesn’t charge rent, the amount of deductible expenses would be limited to the rental income which doesn’t exist in this case. So, there wouldn’t be a tax break. You can reference IRS publication 17 for further details.

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