Prepaid Property Taxes-Timing of Income

[equinecpa]

My client (cash basis taxpayer) collects property taxes from tenants and then remits said taxes to county. I believe he is assessed one lump sum which he divides up between his tenants. He issued invoices to his tenants in Dec 2017, and received payment for these invoices in Dec 2017. He paid the property taxes in Jan 2018.

The payments by the tenants for the property taxes wouldn't be considered income in 2017 would they? Can I report them as a liability?

[TaxGuyBill]

he is assessed

I interpret that as the money he collects from tenants is part of rent, not property tax (the tenants are not assessed property tax). Assuming he is cash-basis, that would make it taxable in 2017.

[equinecpa]

I interpret that as the money he collects from tenants is part of rent, not property tax (the tenants are not assessed property tax). Assuming he is cash-basis, that would make it taxable in 2017.

I'd presume this is a true statement, as the assessments go to him. I found this in the books today and practically died