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The method of reporting chosen by the taxpayer, as provided in section 19-520 shall necessitate the following adjustments to gross income for all purposes under this article:
(1) Cash basis. When a person elects to report and pay taxes on a cash basis, rent for the reporting period shall include:
(A) The total amounts received on "paid in full" transactions, against which are allowed all applicable deductions and exclusions; and
(B) All amounts received on accounts receivable, conditional sales contract, or other similar transactions against which no deductions and no exclusions from rent are allowed.
(2) Accrual basis. When a person elects to report and pay taxes on an accrual basis, rent shall include all rent for the applicable period regardless of whether receipts are for cash, credit, conditional, or partially deferred transactions and regardless of whether or not any security document or instrument is sold, assigned, or otherwise transferred to another. Persons reporting on the accrual basis may deduct bad debts, provided that:
(A) The amount deducted for the bad debt is deducted from rent of the month in which the actual charge-off was made and only to the extent that such amount was actually charged off and also only to the extent that such amount is or was included as taxable rental income; and
(B) If any amount is subsequently collected on such charged-off account, it shall be included in rental income for the month in which it was collected without deduction for expense of collection.
(Ord. No. 7885, § 2, 8-3-92; Ord. No. 10360, § 3, 12-19-06, eff. 1-1-07)