Lorene, Inc., owns an apartment complex. The terms of Lorenes lease agreement require new tenants to pay
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During the current year, Lorene receives monthly rents totaling $28,000, last month’s rent deposits from new tenants of $8,000, and cleaning deposits of $7,000. Lorene keeps $5,000 in cleaning deposits to pay the cleaning company bill on apartments that are not left in good shape (the $5,000 is the actual cost that is paid in cash to the cleaning company) and returns $4,000 in deposits. Lorene’s expenses related to the rental property
(other than the cleaning costs) are $14,000. What is Lorene, Inc.’s gross income from the rental property if Lorene is a cash basis taxpayer? an accrual basis taxpayer?
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Related Book For
Concepts In Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
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