Ground Rent

Ground Rent means:
the rent earned by leased land.

Ground rent received is taxable as ordinary income when received. If the lease is considered a financing device, portions of the rent may be treated as interest, gain, and nontaxable recovery of investment.

Ground rent paid is deductible for a business, but nondeductible for land used for a personal residence. If, however, the ground rent is a financing device, it is treated as a mortgage payment.

See also other Tax Terms and Definitions in U.S.A.

redeemable ground rent.

Example of Ground Rent:

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The Good Title Company owns an office building situated on a site owned by the Widget Makers Retirement Fund. The site is leased to Good Title on a long-term basis and requires the payment of semiannual ground rent to the Widget Makers Retirement Fund.