Question

A taxpayer is required to report rental income and deduct rental expenses on a residence that is rented for __________ days or more as long as the taxpayer lives in the home for the more than ________ days or _________% of the days rented. Rental losses _________(can/cannot) be deducted against ordinary income.

Answer 1

A taxpayer must report rental income and deduct expenses if a residence is rented out for 14 days or more, provided they use it for personal purposes over 14 days or 10% of the rental period. Rental losses cannot be deducted against ordinary income.

Step-by-step explanation:

The question you've asked is about the rules for reporting rental income and expenses for tax purposes. A taxpayer is required to report rental income and deduct rental expenses on a residence that is rented for 14 days or more, as long as the taxpayer lives in the home for more than 14 days or 10% of the days rented. Rental losses cannot be deducted against ordinary income. This aligns with the tax regulations related to personal use and rental of property, distinguishing between personal residence and rental property for tax purposes.