Mason, an accrual basis taxpayer, owns a six-unit apartment building for which he receives rent of $600 per month per unit. In 2012, ﬁve of the units were rented for the entire twelve-month period. fte sixth unit was occupied from January 1st through March 31st. Upon vacating the unit, the tenant was not refunded his security deposit of $400 due to damages to the unit. fte unit was subsequently rented for one year beginning August 1, 2012. On August 1st, the new tenant paid the ﬁrst and last month's rent and a refundable security deposit of $400. What is Mason's total rental income for 2012?

Question

Quizplus · Accepted Answer

($600 × 12 months × 5 units = $36,000) + (3 × $600) + $400 + nonrefunded security deposit + (5 × $600)
+ $600 last month's rent = $41,800) the only amount not included as rental income would be the refundable security deposit of $400.

Mason, an Accrual Basis Taxpayer, Owns a Six-Unit Apartment Building