Vernon Is a Cash Basis Taxpayer with a Calendar Tax

Vernon is a cash basis taxpayer with a calendar tax year. On October 1, 2014, Vernon entered into a lease to rent a building for use in his business at $3,000 a month. On that day Vernon paid 18 months rent on the building, a total of $54,000 ($3,000 × 18 months) . How much may Vernon deduct for rent expense on his 2014 tax return?

A) $0
B) $12,000
C) $36,000
D) $54,000
E) None of the above