In December 2016,Max,a cash-basis taxpayer,rents an apartment to Kadeem.Max receives both the first and last months' rent totaling $1,800 plus a security deposit of $400.The amount of income reported by Max as taxable in 2016 is

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As a cash-basis taxpayer, Max must report income when it is received. The first and last months' rent totaling $1,800 is considered income in 2016. The security deposit is not income unless it is forfeited or used for repairs.

In December 2016,Max,a Cash-Basis Taxpayer,rents an Apartment to Kadeem