Jimbob Meyers is the proprietor of the Polo Horse Bar and Grill, which recently relocated to the Bakersfield Mall. Jimbob paid Oilcap Industries, the owner of the mall, a $20,000 security deposit, which was the equivalent of one-month's rent. Under the terms of the lease, Oilcap must return the deposit at the end of the lease term, less any amount retained to repair damages caused by Jimbob's occupancy. In the meantime, OilcaDilay retained the security deposit, which it commingled with its own funds. Oilcap is not obligated to pay interest on the deposit. Is Olicap required to include the deposit in gross income?

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The detailed answer for the above question is provided below Whether Oilcap needs to include the sec... View the full answer