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Rental Income for an Accrual Basis Taxpayer

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Mason, an accrual basis taxpayer, owns a six unit apartment complex for which he receives rent of 600 per month per unit. In 2005 five of the units were rented for the entire 12 month period. The sixth unit was occupied from January 1st through March 31. Upon vacating the unit, the tenant was refunded his security deposit of 400 due to damages of the unit. The unit was subsequently rented for one year beginning August 1, 2005. On August 1 the new tenant paid the first and last month's rent and a refundable security deposit of 400. What is Mason's total rental income for 2005?

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Solution Summary

The rental income for an accrual basis taxpayer is determined.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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