Question

James owns a home in Lake Tahoe, Nevada, that he rented for $1,600 for two weeks during the summer. He lived there for a total of 120 days, and the rest of the year the house was vacant. The expenses for the home included $6,000 in mortgage interest, $900 in property taxes, $1,300 in maintenance and utilities, and $2,500 in depreciation. How much rental income from the Lake Tahoe home would James report for the current year?

Answer 1

A. $0

Step-by-step explanation:

No money or amount is reported as a rental income from the Lake Tahoe home that current year. This is because the house is considered as primarily personal. He only rents it outside for two weeks in the summer. Most times when the house is not vacant, he is the one staying there. Properties that are primarily personal are not reported as rental income in scenario like this.