Norah,who gives music lessons,is a calendar year taxpayer using the cash basis method of accounting.On October 1 of this year,she received $1,200 for a one-year contract beginning on that date to provide 10 lessons.She gave 6 lessons this year.How much should Norah include in income this year?

Question

Quizplus · Accepted Answer

Under the cash basis method, income is recognized when it is received. Norah received $1,200 this year, so she must include the entire amount in her income for this year, regardless of when the services are performed.

Norah,who Gives Music Lessons,is a Calendar Year Taxpayer Using the Cash