7. (TCO I) David, a cash basis taxpayer, owns two rental properties. Based on the following information, compute the amount that he must include in his 2012 gross rental income. Property #1, security deposit on one-year lease received 2/1/12 All of deposit returned at lease end: $1,000 Property #1, payment received 2/1/12 for last month of lease(1/13): $900 Property #1, rental income received in 2012 2/12-12/12: $8,000 Property #2, rental income received in 2012 1/12-12/12: $9,600 Property #2, security deposit received 1/1/12 to be used for last month's rent: $800 Property #2, rent 1/13 received 12/28/12: $800

$ 21,100 $19,300 $18,500 $20,100