Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Schedules K-1 and Rental Income Workout

Rental Income and Expenses

Case Study 1: Rental Income

During the tax year, LaDonna signed a five-year lease to rent her property. In the first year, she received $5,000 for the first year's rent and $5,000 as the last year's rent in advance.

If LaDonna uses the cash basis method of accounting, how much do you include in her rental income for the tax year?

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