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Landlord rents a parcel of real estate to Tenant. During the...

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Accounting

Landlord rents a parcel of real estate to Tenant. During the term of the lease, Tenant locates a more suitable parcel and pays Landlord $10,000 in exchange for Landlord's agreement to terminate the lease. How should Landlord classify the $10,000 receipt for federal income tax purposes?
A. As advance rent to be capitalized and amortized over the remaining term of the original lease
B. As a security deposit to be converted to rent income at the
C. As a nontaxable receipt
D. As rental income in the year of the receipt
E. None of the above

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