1. Bob Buttons, a cash basis calendar year taxpayer, owns and operates an apartment building. During 2016, he received the following payments:

	Lease cancellation fee from an old tenant	$500
	Rent from a new tenant covering the period from July 1, 2017	5,000
	Security deposit on June 30, 2016, to be returned to the tenant if no damage has occurred	700

What is the amount of Bob's gross rental income for 2016?

A) $1,750

B) $2,450

C) $5,500

D) $6,200

2. Each of the following would be one of the requirements for a payment to be alimony under instruments executed after 1984 except:

A) Payments are required by a divorce or separation instrument

B) Payments can be a noncash property settlement

C) Payments are not designated in the instrument as not alimony

D) Payments are not required after death of the recipient spouse

3. In July 2008, Dan Farley leased a building to Robert Shelter for a period of 15 years at a monthly rental of $1,000 with no option to renew. At that time, the building had a remaining estimated useful life of 20 years. Prior to taking possession of the building, Shelter made improvements at a cost of $18,000. These improvements had an estimated useful life of 20 years at the commencement of the lease period. The lease expired on June 30, 2016, at which point the improvements had a fair market value of $2,000. The amount that Farley, the landlord, should include in his gross income for 2016 is: A) $6,000 B) $8,000 C) $12,000 D) $24,000

4. Percy Peterson received a grant from the Department of Education for a special research project on education. He received $500 per month for the period May 1 to December 31. Percy is not a candidate for a degree. The amount of the fellowship he may exclude from income for the tax year is: A) $0 B) $1,600 C) $2,400 D) $3,000 E) $4,000

5. Makayla, a cash basis saleswoman, receives commissions in February 2020 based on sales made in the last quarter of 2019. The commissions are includible in 2019 gross income. True or false