Security deposit on rental?

[zeros]

Is the security deposit taxable?

[Burke]

Taxable to whom? Are you asking is it considered rent when received by the landlord? No, it is deposited into an escrow account while the lease is in effect. Or are you asking if it is taxable to the tenant when returned to him at the end of the lease? No, because he never should have deducted it as rent paid (if he was eligible to deduct rent paid -- as in a business). If the landlord reported it as income when it was received, then he gets to deduct it when returned.