Joe Smith, a cash-basis taxpayer, earned an annual salary of $80,000 at Resolute Corp. in 2014, but he elected to take only $50,000. Resolute, which was financially able to pay Smith's full salary, credited the unpaid balance of $30,000 to Smiths account on the corporate books in 2014, and actually paid this $30,000 to Smith on January 30, 2015. How much of the salary is taxable to Smith in 2014? Explain.

The taxable salary of Mr. Joe Smith is $ 50,000 in year 2014, and $ 30,000 will be treated as incomes of next year, i.e. 2015, since Smith is a cash - basis taxpayer.

A cash - basis taxpayer is the one, who reports incomes and deductions in the year in which there areactually received or paid.

Therefore, in 2014, the Taxable salary of Smith is $ 50,000

Assume all of the same facts above, except that Chloe rents her condominium a total of 14 days in 2014. How would she report her income and deductions from the property?