Do I need to pay the tax on the interest my landlord is earning from my security deposit?
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Do I need to pay the tax on the interest my landlord is earning from my security deposit?
My landlord invested our security deposit and is collecting interest. I just received a 1099-INT from the bank. When I spoke to my landlord about this, they said it’s in my lease which only states that they are investing the money and collecting interest, not that I will be responsible for paying the tax. Is this legal? How were they able to create a bank account without my authorization?
Asked on February 9, 2012 under Real Estate Law, New York
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Yes, it is legal and generally required under the law in your state. Most of the time the landlord has a main account and opens sub accounts for your benefit. They can and it is legal too. And the interest is income to you. Unless you are living in a super high end apartment your interest income should not be that much. Good luck.
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