a. Determine the proper tax year for gross income inclusion in the following cases. a.

Apex Lawn Corporation is a calendar year accrual taxpayer that started business in late 2022. It contracts to provide lawn, tree maintenance, and snow removal services to local businesses, using multiyear contracts. The company sells 5 year long contracts five years of coverage for $5,000 thats $1,000 per year! On January 1, 2023, the company sold 100 contracts and collected $500,000. How much, IF ANY, of the $500,000 is included by the company in gross income subject to tax for 2023? For 2024? For 2025? For 2026? For 2027?

b. The taxpayer is in the office equipment rental business and uses the accrual basis of accounting. On December 31, 2022, it collected $96,000 which covers the rental for the following year all of 2023, over 12 months thats $8,000 per month! When is the $96,000 -received in December 2022- included in taxable gross income?