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Troy, a Cash Basis Taxpayer, Owns an Office Building

Question 57

Multiple Choice

Troy, a cash basis taxpayer, owns an office building. His records reflect the following for 2012. On March 1, 2012, office B was leased for twelve months. A $900 security deposit was received which will be used as the last month's rent.
On September 30, 2012, the tenant in office A paid Troy $3,600 to cancel the lease expiring on March 31, 2012. fte lease of the tenant in office C expired on December 31, 2012, and the tenant left improvements valued at
$1,400. fte improvements were not in lieu of any required rent.
Considering just these three amounts, what amount must Troy include in rental income on his income tax return for 2012?


A) $5,900
B) $5,000
C) $4,500
D) $1,800

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