[Solved] For which of the following independent situations would the recipient be required to recognize taxable income? A)Fire to a building resulted in a bookstore being closed for two months.An insurance company paid the proprietor of the bookstore $12,000 for lost profits during the two-month period. B)As part of the sale price of a drug store, the seller received $12,000 for agreeing not to compete with the buyer in the same town. C)On January 1 of the current year, X leased a building from Y.In lieu of paying Y rent of $1,000 per month, X made improvements to the building amounting to $12,000. D)All of the above; each recipient is required to recognize $12,000 of taxable income. Freud's Theory: A set of psychoanalytic theories developed by Sigmund Freud that focus on unconscious motives and conflicts, particularly those originating in childhood. Phallic Stage: The phallic stage is a concept in Freudian psychology referring to the period in early childhood when the libido (sexual energy) is concentrated in the genital area. Erotic Desires: Feelings of wanting or longing for sexual contact or relationships. Compensation: A strategy whereby one makes up for a deficiency in one area by excelling in another area.