How much must be included in your business income


Problem: You started a health club business in July 2021 that opened its doors September 1, 2021, offering the latest and most sophisticated equipment. Heavy advertising resulted in 200 people joining the club. Contracts were drawn up for a promotional rate of $75 per month with a $400 initial one-time non-refundable fee if payment for one year was made in advance by the end of August. All 200 individuals took advantage of the offer. You received $260,000 in advance payments [($75(12) + $400)(200 people)]. You choose December 31 as your fiscal year end. How much must be included in your business income for 2021 with respect to the amount received?

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Taxation: How much must be included in your business income
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