Question

Lester rents his vacation home for 6 months and lives in the home during the other 6 months of 2022. The gros rental income from the home is $43,500. For the entire year, real estate taxes are $2,200, interest is $3,000, and utilities and maintenance expenses are $2,500. What is Lester's allowable net loss from renting his vacation home? Oa. $3,850 loss Ob. $4,200 loss O c. $350 loss d. $0 loss​

Answer 1

To calculate Lester's allowable net loss from renting his vacation home, subtract his expenses from his gross rental income. The formula to calculate his allowable net loss is [Gross Rental Income - (Real Estate Taxes + Interest + Utilities and Maintenance Expenses)].

Therefore, Lester's allowable net loss from renting his vacation home is $35,800.

Step-by-step explanation:

To calculate Lester's allowable net loss from renting his vacation home, we need to consider his rental income and expenses. In this case, his gross rental income is $43,500. We subtract his real estate taxes of $2,200, interest of $3,000, and utilities and maintenance expenses of $2,500. The formula to calculate his allowable net loss is:

Allowable Net Loss = Gross Rental Income - (Real Estate Taxes + Interest + Utilities and Maintenance Expenses)

Substituting the values, we have:
Allowable Net Loss = $43,500 - ($2,200 + $3,000 + $2,500) = $43,500 - $7,700 = $35,800