Kate is an accrual basis, calendar-year taxpayer. On November 1, 2019, Kate leased out a building for $4,500 a month. On that day Kate received 7 months rental income on the building, a total of $31,500 ($4,500 × 7 months). How much income must Kate include on her 2019 tax return as a result of this transaction?

Question

Quizplus · Accepted Answer

As an accrual basis taxpayer, Kate must include the entire $31,500 received for the 7 months of rent in her 2019 tax return, as it was earned in that year.

Kate Is an Accrual Basis, Calendar-Year Taxpayer