In December 2019,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 2019 is

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Max must report the first month's rent of $900 as income in 2019 because he received it in 2019. He does not have to report the last month's rent or the security deposit in 2019 because he has not yet earned that income.

In December 2019,Max,a Cash-Basis Taxpayer,rents an Apartment to Kadeem