Q: I will be doing certificate of rent paid (CRP) forms soon, and I have a question about them. I have a renter who paid January 2017 rent on Dec. 23, 2016. Do I include that rent amount on the CRP form for 2016, or do I hold that amount over for 2017?
As far as my taxes go, I will be recording that as 2017 income. I don't plan to overstate my income just because the renter paid early. However, I'm not sure if I can handle the CRP form the same way. What do you think?
A: I cannot discuss how you should handle your income taxes. You should ask your accountant as to whether you should include the early rent payment as income for 2016 or 2017.
Regarding the CRP, in Minnesota all landlords are required to provide their tenants with CRP forms. They should be given to every tenant who rented from you during any part of the previous year. The deadline for landlords to supply their tenants with CRP forms is by Jan. 31, 2017, or by the Minnesota Department of Revenue's late-deadline date of March 1, 2017. A landlord must provide one form to each unmarried tenant and one form for each married couple.
If there is a dispute over how much rent was paid, then tenants can file on their own through the Minnesota Department of Revenue by completing a Rent Paid Affidavit. The department will assist the tenant in doing so, and may contact the landlord to confirm the facts.
The CRP reflects rent paid on a unit or property for a particular calendar year, not necessarily when the rent was collected. You should not include your tenant's early rent payment on the CRP form for 2016 rent, since that was paid to rent the property in 2017.
When you provide the CRP forms to your tenants, you may be asked questions about the property tax refund or income tax issues. If you are asked questions, you can refer your tenants to the Minnesota Department of Revenue's website, revenue.state.mn.us, where they can find find forms, instructions and other information. Tenants also can call 651-296-3781 or 1-800-652-9094. Information is also available by writing to: Minnesota Revenue Mail Station 5510, St. Paul, MN 55146-5510.
Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to kklein@kleinpa.com, or write to Kelly Klein c/o Star Tribune, 650 3rd Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.