We began renting our current apt in june of 06 and signed a one year lease. We began looking at homes to buy and found one. our offer was excepted and closing is set for feb 28th. My question is: if we breaking the lease early does the pre-paid last months rent that was given when we signed the lease count for the month of march if we intend on being out by march 15th? Also do we totally lose the security deposit? The place is in the exact same shape it was when we moved in so no damages have been incured in regards to that. It seems like i would be responsible to get the place rented by what i've read so he doesnt lose money that way either. Ploease advise i'd like to know how to approach the land lord about all this. The lease doesnt seem to specify besides saying if the tenant breaks the lease the landlord may... "file law suite, Evict, and keep security deposit"

Thank you in advance

If you signed a year lease, then you are liable for the terms of the lease. If I read you post correctly, your lease started on June of 2006, which means that you are liable for rent until June of 07. You can try to negotiate a payment plan where you pay a penalty for breaking the lease. At this point your last months rent does not appear to cover the cost of the months remaining on your lease.
Sure, he can try to mitigate his damages, but that does not mean that he has to accept anyone that has the money to pay the rent. He has considerable latitude in deciding who would make a good tenant. Then there is loss of income due to unit be vacant, advertising and keeping the heat going despite the unit being vacant.

would you have any suggestions as to what the best way to handle this would be? We are probably the best tenants he has right now and have been early every time with the rent. it seems like you are saying that we will have to pay until june even though we wont be living here. Is that correct?

You can come to an agreement with him such as agreeing to pay two months rent in advance in return to be let out of the lease, or agree to forfeit the deposit and last months rent.

The other alternative is to risk going to court and have the Judge decide what is fair compensation for the LL. The latter will probably ruin your credit and rental history. Your options would depend on the strength of his lease.