Why Doesn't My 1099 Amount Match the Income on My Cash Flow Report?
Understanding how prepaid rent affects your tax documents
If you notice a difference between your 1099-MISC amount and the income shown on your Cash Flow Report, it's most likely due to prepaid rent.
What is Prepaid Rent?
Prepaid rent occurs when your tenant pays rent in advance—for example, paying January 2026 rent in December 2025.
How the IRS Treats Prepaid Rent
The IRS considers prepaid rent as taxable income in the year it was received, not when it applies to the lease. This means:
- If your tenant prepaid January 2026 rent in December 2025, that payment is taxable income for 2025
- This income will appear on your 2025 1099-MISC
- Your Cash Flow Report may show this differently since it tracks when rent applies to the lease
Example
Your tenant pays $1,500 on December 28, 2025 for January 2026 rent.
| Document | How It's Reported |
|---|---|
| 1099-MISC (2025) | Includes the $1,500 as 2025 income |
| Cash Flow Report | May show this as January 2026 income |
This is why the two amounts may not match exactly.
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