Cal (An Accrual-Basis Taxpayer) Enters into a Ten-Year Lease on Some

question 76

Multiple Choice

Cal (an accrual-basis taxpayer) enters into a ten-year lease on some rental property.In year 1, Cal receives $3,000 as a security deposit, $5,000 for the first year's rent, and $5,000 for the last year's rent.How much income must Cal report in this first year?

• A)$5,000
• B)$8,000
• C)$10,000
• D)$13,000