Security Deposit not refunded

I had a tenant that did a lot of damage at move out so they will not be receiving any of their security deposit back. I hold the deposit, but I have a property manager that is doing the repairs. The deposit is actually in my Stessa cash account. I need to move that out to either my checking or upload it to my manager, not sure which? I’ve already uploaded more than than the deposit from another account to pay for the repairs so far. I saw in the message boards we are supposed to treat security deposit as income? It’s not really income, and it will raise our total income potentially effecting our tax bracket. Once there is a Security Deposit placed in income category if that’s how we have to do it, then how do I credit the repairs that my manager is doing against it?
ty, Lisa

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This is an important question that is a bit disturbing that Stessa has not responded to in 2 years. I am having the problem of Security Deposits getting mixed in with rent as income on the ledger (a big no no in NC). Also why does it automatically default to a security deposit refund (that I cannot manually change) when the tenant still owes money after moving out? How do I adjust this?