Mason, an Accrual Basis Taxpayer, Owns a Six-Unit Apartment Building

question 58

Multiple Choice

Mason, an accrual basis taxpayer, owns a six-unit apartment building for which he receives rent of $600 per month per unit. In 2012, five of the units were rented for the entire twelve-month period. fte sixth unit was occupied from January 1st through March 31st. Upon vacating the unit, the tenant was not refunded his security deposit of $400 due to damages to the unit. fte unit was subsequently rented for one year beginning August 1, 2012. On August 1st, 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 2012?

• A) $40,800
• B) $41,200
• C) $41,800
• D) $42,200

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Definitions:

Slope

A measure of the steepness or incline of a line, often calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Good A

A generic term often used in economics to describe a type of product or commodity.

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can purchase with a given budget at prevailing prices.

Intercepts

Points where a line or curve crosses the axes on a graph, typically used to describe the starting points of equations in coordinate geometry.