business expense accounting

I'm curious of how expenses are accounted for in the following scenario...
Say a business such as a retailer pays $100 a month in rent, and $5 a month to someone to cut the grass. It is likely that that on their
1120, they will list and deduct $100 as rent expense (line 16) and maybe the $5 as maintenance expense (line 14)...
But what about situations involving triple-net leasing, where the landlord charges a base rent and then passes through other expenses such as CAM, insurance, and property taxes?
Say that same tenant get's a rent invoice from the landlord that lists the $100 base rent, and the $5 as additional rent for the passed- through expense (where tenant will pay the landlord $105, and then the landlord turns around and pays the lawn guy the $5). So now... how does the tenant in this second scenario list expenses? Does he deduct $105 in total rent expenses? Is there any line or forms for the tenant to distinguish between base rent and additional rent paid? ('Base rent' being an unchanging flat-rate rent for the space, and 'additional rent' being the changing amounts charged as expenses are passed-through to the tenant).
I've done some reading in the IRS instruction booklets, but cannot find a definitive, clear-cut directive on this. If in case you are leaning to say that the tenant in the second case will still deduct as in the first scenario, keep in mind that the landlord will be listing a $5 maintenance expense from HIS gross rents collected, and then the total of $10 maintenace deductions out there in the world give an inaccurate picture.
What do you think? Thanks.
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Also, by the way, if anyone can point me towards any written or online material on this subject, it'd be great... thanks.
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Ever hear of KISS? ....and I'm not talking about the band....
Usually the best accounting is the simplest accounting. When you write two checks, you post two entries, maybe to two different accounts.

Rent.
Sure.
You can make the accounting as difficult as you like, or as simple as you like (to a degree).
There's no real point to break the phone bill down into the various costs, per line, advertising, taxes, fees, long distance, etc. It could get burdensome, and the more detailed you try to get with the bookkeeping, the more chance you have of making mistakes.

You're getting very confused in the details. You do realize that your gross wages are used to pay for your own, let's say groceries, and the grocery store has a salary expense called wages they pay to their own employees. So using the pattern you seem to be following, you have an inacurate picture as to total wages.
Look, it doesn't matter all that much. You're just making "make-work" by breaking down the payment to the landlord.
--
Paul A. Thomas, CPA
Athens, Georgia
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I just want to understand more about the reasoning behind whatever is the right answer. It's also easier to just turn on your t.v., cell, or car and use them without thinking about it, but sometimes someone wants to pull off the cover and understand more about how it works.
So anyways...
a) I take it that the conclusion is that all the pass-throughs that the tenant pays is considered and deducted as "rent"? ("rent" in the broad sense).
b) and then, does the tenant list this as one figure on his 1120 rent expense, or does it get broken down further on another form?
thanks
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I would treat it all as rent. It's either a single monthly check, or some number of checks (rent + an additional check or checks for taxes, insurance, etc).

If it's paid to a single entity, in this case the landlord, then it's called "rent". The only other form that may come into play is a Form 1099-MISC where the amount is reported as rent paid to the landlord. I'd make it for the full amount, inclusive of any taxes, insurance, etc paid).
--
Paul A. Thomas, CPA
Athens, Georgia
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wrote:

ok thanks
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To help you clear things up, the landlord's gross income should be for $105.
Of course, some folks cheat and lie.
--
Paul A. Thomas, CPA
Athens, Georgia
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