Please and Thank you

Your client, Luther Lifo, is a professor who runs a CPA review course. He comes to you with the following tax questions: Question One. Luther teaches CPA review courses on either a guaranteed or a nonguaranteed basis. Under the contractual guaranteed program, students pay higher tuition and, if they fail the CPA examination, are entitled to a full refund within two weeks of the release of the results. The CPA review course contracts require him to place the tuition in a set-aside escrow account until the students pass the exam; he established an escrow account as a qualified trust account for this purpose. The registration fee and tuition must be paid in full before the classes begin. Thus, students enrolled in the class that started in January 20x1 paid their tuition in December 20x0. In 20x0, Luther deposited registration fees and tuition, including $30,000 in guaranteed tuition payments for the winter 20x1 courses into a qualified trust escrow account. Also during 20x1, he paid refunds to guaranteed students who failed the 20x1 exams from that account. Does Luther report the $30,000 as income in 20x0 or 20x1? How are the refunds paid in 20x1 treated for tax purposes? State the authority for your conclusion. Question Two. Luther is a majority shareholder in a corporation that owns an office building. He leases space in the building for use in his CPA review course. Luther pays approximately $20 per square foot in annual rent. The corporation leases the remaining space in the building to a LSAT, GMAT, SAT, and GRE review course run by other taxpayers for approximately $10 per square foot. Luther's main intent in negotiating the discounted lease was to secure the additional traffic generated by the other review courses in order to enhance the potential revenue for the CPA review course. What is the amount of rent that Luther can deduct in connection with the CPA review course? State the authority for your conclusion. After appropriate research, write a letter to Luther explaining your findings. His address is 321 Fifo Street, Temecula, CA 91980