On December 1, 2012, Daniel, an accrual basis taxpayer, collects $12,000 rent for December 2012 and $12,000 for January 2013.Daniel must include the $24,000 in 2012 gross income.

Question

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As an accrual basis taxpayer, Daniel must include the rent when it is earned, regardless of when it is actually received. Since he collected rent for both December 2012 and January 2013 in December 2012, he must include the entire $24,000 in his 2012 gross income.

On December 1, 2012, Daniel, an Accrual Basis Taxpayer, Collects