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#2004715 - 03/27/15 06:37 PM Rental Income deposited into personal account
BSAAnonymous Offline
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Joined: Feb 2012
Posts: 165
If you have a customer who is depositing cash into his personal account and indicates it is from his rental properties, do you ask the customer to open a "business account" for this rental income? I'd like to know how other institutions approach this. Thank you.

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#2004724 - 03/27/15 06:54 PM Re: Rental Income deposited into personal account BSAAnonymous
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,220
Galveston, TX
Six of one half a dozen of the other - it is a bank policy decision. Are you talking about $400 a month or $4,000?? Is he running other obvious business expenses out of his personal account. If you question the amount, ask for his last year's tax return.
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#2004725 - 03/27/15 06:56 PM Re: Rental Income deposited into personal account BSAAnonymous
jaenelle Offline
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Joined: Sep 2005
Posts: 50
Kansas
I have a rental house and I don't maintain a separate account for the rent and expenses from it. I've never had anyone say anything to me about it.
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#2004746 - 03/27/15 07:11 PM Re: Rental Income deposited into personal account BSAAnonymous
John Burnett Offline
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John Burnett
Joined: Oct 2000
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Cape Cod
I think there is a gray line out there someplace that separates a business and personal rental activity. Personally, I keep a separate account for a rental house we own. It's just simpler at tax time to have the income and expenses in one place for that house. But even though the IRS lets me treat it as a business (for tax purposes), providing certain tax benefits, I don't consider it a business -- I sure as heck could not survive on the income.

As suggested earlier, it's largely a matter of dollar magnitude and bank policy, along with customer preference.
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#2004754 - 03/27/15 07:37 PM Re: Rental Income deposited into personal account BSAAnonymous
Elwood P. Dowd Offline
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Elwood P. Dowd
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Posts: 21,939
Next to Harvey
As suggested, it's a pure judgment call based on the scale of the operation. There's no specific dollar amount or number of properties where it's obvious he should put the income and expenses through a separate account.
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#2004755 - 03/27/15 07:38 PM Re: Rental Income deposited into personal account BSAAnonymous
MagicCity Offline

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MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
I look at the property website. If the property is in their personal name, the monies run through the personal account.

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#2004764 - 03/27/15 07:43 PM Re: Rental Income deposited into personal account MagicCity
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
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Next to Harvey
That has the attribute of being logical. It also shows some "due diligence" in actually verifying that he really does own enough real estate to explain the amount of funds coming into the account.
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