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Receipt of $ 70,000 by a taxpayer from a tenant for rental income. $ 15,000 pertains...

Receipt of $ 70,000 by a taxpayer from a tenant for rental income. $ 15,000 pertains to 2019, any $ 55,000 pertains to 2020……..

a. If the taxpayer is on the cash basis for tax purposes.

b. If the taxpayer is on the accrual basis for tax purposes.

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Answer #1

The taxpayer is on the accrual basis for tax purposes.

Though the taxpayer has received rental income of $ 15000 pertaining to 2019 in 2020, but tax department always takes into account, income of a taxpayer on accrual basis.

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