Kate is an accrual basis, calendar-year taxpayer. on november 1, 2018, kate leased out a building for $4,500 a month. on that day kate received 7 months rental income on the building, a total of $31,500 ($4,500 × 7 months). how much income must kate include on her 2018 tax return as a result of this transaction? (a) 4,500 (b) 54,000 (c) 9,000 (d) 31,500 (e) none

Option (C) is correct.

Explanation:

Given that,

On November 1, 2018

Kate leased out a building = $4,500 a month

Received 7 months rental income = $31,500

Kate include on her 2018 tax return as a result of this transaction:

= Value of leasing out a building for a month × 2

= $4500 × 2

= $9,000

Therefore, the Kate include on her 2014 tax return as a result of this transaction = $ 9000

answer; /// (b) i believe its that is paid to state and federal taxing authorities;

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return