Question

Joe’s Cross Fit, an accrual method taxpayer, provides personal training services. On October 30, 2019, Barbie pays Joe’s Cross Fit $2,400 cash for 24 months of personal training services ($100/month). Barbie’s training sessions beginning on November 1, 2019. For book purposes, Joe's Cross Fit will recognize $200 in income in 2019, $1,200 in 2020, and $1,000 in 2021. For tax purposes, how much of the $2,400 must Joe’s Cross Fit include in gross income in 2019 if Joe’s elects to defer prepaid income to the maximum extent possible?

Answer 1

According to the given datar - Joe's Cooss fit, an accrual a method taxpayer, provides personal training services, On october 30, 2019, Borbie pays Joe's cross fit $2,400 cash for 24 months of personal training services ($100/month) Barbie's training sessions beginning on November 1, 2019 for book purposes, Joe's Cross fit will recognize $200 in income an 2019, $1,200 in 2020 and $1,000 in 2001 for tax peroposes, Joe's cross fit must include $200 in gross income in 2019 if Joe's elects to defer prepaid Income to the maximum extent possible. for tax purposes, Joe's Cross fit must include $1,200 in gross income in 2020.