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12 November, 16:01

Kate is an accrual basis, calendar-year taxpayer. On November 1, 2018, Kate leased out a building for $4,500 a month. On that day Kate received 7 months rental income on the building, a total of $31,500 ($4,500 * 7 months). How much income must Kate include on her 2018 tax return as a result of this transaction? (A) 4,500 (B) 54,000 (C) 9,000 (D) 31,500 (E) none

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  1. 12 November, 18:22
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    Option (C) is correct.

    Explanation:

    Given that,

    On November 1, 2018

    Kate leased out a building = $4,500 a month

    Received 7 months rental income = $31,500

    Kate include on her 2018 tax return as a result of this transaction:

    = Value of leasing out a building for a month * 2

    = $4500 * 2

    = $9,000

    Therefore, the Kate include on her 2014 tax return as a result of this transaction = $ 9000
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