In December 2014,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 as taxable in 2014 is

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As a cash basis taxpayer, Max must report income when it is received. In 2014, Max received $1,800 for the first and last months' rent, which is taxable. The $400 security deposit is not taxable in 2014 as it is refundable and not considered income unless it is forfeited.

In December 2014,Max,a Cash Basis Taxpayer,rents an Apartment to Kadeem