On December 1,2015,Daniel,an accrual basis taxpayer,collects $12,000 rent for December 2015 and $12,000 for January 2016.Daniel must include the $24,000 in 2015 gross income.

Question

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According to the accrual basis of accounting, income is considered earned when it is earned, not when it is received. Therefore, Daniel must include the $24,000 rent in his 2015 gross income, even though he collected part of it in January 2016.

On December 1,2015,Daniel,an Accrual Basis Taxpayer,collects $12,000 Rent for December