In December 2019, Todd, a cash basis taxpayer, paid $1,200 of fire insurance premiums for the calendar year 2020 on a building he held for rental income. Todd deducted the $1,200 of insurance premiums on his 2019 tax return. He had $150,000 of taxable income that year. On June 30, 2020, he sold the building and, as a result, received a $500 refund on his fire insurance premiums. As a result of the above:
a. Todd should amend his 2019 return and claim $500 less insurance expense. b. Todd should include the $500 in 2020 gross income in accordance with the claim of right doctrine. c. Todd should add the $500 to his sales proceeds from the building. d. Todd should include the $500 in 2020 gross income in accordance with the tax benefit rule. e. None of these choices are correct.