Jim,
Good argument - and I am no CPA and I don’t do my own returns, so I only regurgitate what I hear from my guys, but as far as the income tax all at once - we claim it as rent - and as we go on Sch E?.
The non-refundable option consideration is non taxable until A - they fulfill the contract or B - they default. So what you wind up having is an enormous amount of cash with unpaid taxes. So we wait for a year that we have a low taxable income and claim some or all of it then - not paying much in taxes and not having to pay it later at all.