VARIOUS TAXPAYER SITUATIONS INVOLVING THE DETERMINATION OF WHEN INCOME IS TAXED TO TAXPAYER (1) An automobile dealer has several new cars in inventory, but often does not have the right combination of body style, color, and accessories. In some cases the dealer makes an offer to sell a car at a certain price, accepts a deposit, and then orders the car from the manufacturer. When the car is received from the manufacturer, the sale is closed, and the dealer receives the balance of the sales price. At the end of the current year, the dealer has deposits totaling $8,200 for cars that have not been received from the manufacturer. When is the $8,200 subject to tax? (2) An exterminating company, which is organized as a corporation, is a calendar year taxpayer. It contracts to provide services to homeowners once a month under a one or two year contract. On April 1 of the current year, the company sold a customer a one year contract for $360. How much of the $360 is taxable in the current year if the company is an accrual basis taxpayer? If the $360 is payment on a two year contract, how much is taxed in the year the contract is sold and in the following year? (3) A corporation, an accrual basis taxpayer, owns an amusement park whose fiscal year ends September 30. To increase business during the fall and winter months, the corporation sold passes that would allow the holder to ride "free" during the months of October through March. During the month of September, $6,000 was collected from the sale of passes for the upcoming fall and winter. When will the $6,000 be taxable to the corporation? (4) A taxpayer is in the office equipment rental business and uses the accrual basis of accounting. In December he collected $5,000 in rents for the following January. When is the $5,000 taxable? REQUIRED: For each of the above situations, indicate the tax year or years in which the income will be taxable. Support your answer with the appropriate tax law provision.