R is a calendar-year, an accrual-basis taxpayer who received during the current year $20,000 in rent...
R is a calendar-year, an accrual-basis taxpayer who received during the current year $20,000 in rent paid in advance, applicable to next year, and no significant services were provided in the two-year rental agreement. He also received a $2,000 security deposit refundable at the end of the lease assuming compliance with the terms of the lease.
How much must R include in gross income for the current year?
Homework Answers
Answer) Rent Received in Advance shall be treated as part of gross Income in the year it is received, even if adavnce rent in not mentioned in lease or rental agreement.
If any security deposit is received from tenant then shall not be treated as income as it has be refundable at the end after completion of agreement. The same shall be treated as income in that year when you are no longer obliged to return it.
Therefor, Gross Income = Advance Rental Income
= $20000
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R is a calendar-year, an accrual-basis taxpayer
who received during the current year $20,000 in rent...
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