The IRS Commissioner publishes his interpretation of the tax Code in the form of regulations. They do not have the force and effect of law except in those cases in which the law on a particular subject calls for rules on that subject to be expounded through regulations. Reinvested Dividends Earnings that the shareholder has accepted as additional shares of stock rather than as cash. They are taxable in the year constructively received. Rental Income Income received by the taxpayer for allowing another person's use of the taxpayer's property.
Rental income includes advance rental payments, late payments, and current payments.
Payments received for lease cancellation and forfeited security deposits are rental income the year received or forfeited. Rental income is considered passive income for purposes of the passive loss rules, except for that of qualified real estate professionals. Repairs Current expenditures to restore business-use property to an original condition or maintain the property through minor alterations rather than to extend its useful life. The cost of repairs normally is deductible annually. Substantial repairs that increase the value or extend the life of the property are treated as capital improvements and must have their cost recovered over a number of years.