It's January again when self-employed people start sorting their shoebox of records to prepare for tax preparation.
If you're a residential rental property owner in Minnesota, you are required to issue a CRP (Certificate of Rent Paid) to each of your tenants by January 31, 2007. The State of Minnesota website has the forms on this page under "CRP Instructions for Landlords". The forms are quite simple to fill out if you take the time to read the simple one page of directions.
People from other states or who have not rented question what is the purpose of the CRP. The form allows tenants to file for a rebate of a portion of the property tax paid by the property owner. Minnesota has a property tax discount for owners who live in the property they own. As a result, non-owner occupied property, i.e., rental property, has higher taxes. The theory is that landlords charge higher rent to tenants to cover the tax cost (no kidding!). The rent rebate is the State's attempt to give a portion of those higher rents back to the tenants.
It's convoluted, I know, but keep it simple. Fill out the form and mail it to each to your tenants to be in compliance with the State law.
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