1. Mark Mayer, a cash basis taxpayer, leased property on June 1, 2016, to Perry Purly at $325 a month. Perry paid Mark $325 as a security deposit which will be returned at the end of the lease. In addition, Perry paid $650 in advance rent which is to be applied as rent to the last two months in the lease term. The lease is to run for a two-year period. What is Mark's rental income for 2016?

a.) $1,950

b.) $2,275

c.) $2,600

d.) $2,925

e.) $3,250

2. In 2016, Norm, a carpenter, received a beach boat from the Newport Marina in exchange for carpentry work on a new dock. The beach boat cost the marina $1,600. The fair market value of the boat is $2,000. What amount, if any, is includible in Norm's 2016 gross income as a result of this transaction?

a.) $2,000

b.) $1,800

c.) $1,600

d.) $400

e.) $0

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. 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