Mike and Pam own a cabin near Teluride, Colorado. In the current year the cabin was rented for 8 days to friends. Mike and Pam used the cabin a total of 82 days during the same year. After allocating the expenses between personal and rental use, the following rental loss was determined: How should Mike and Pam report the rental income and expenses for last year?
A) Report the $100 loss for AGI.
B) Include the $700 in gross income, but no deductions are allowed.
C) Only expenses up to the amount of $700 rental income may be deducted.
D) Report the interest $300) and taxes $250) as itemized deductions and the other expenses for AGI.
E) No reporting for the rental activity is necessary.

Question

Mike and Pam own a cabin near Teluride, Colorado. In the current year the cabin was rented for 8 days to friends. Mike and Pam used the cabin a total of 82 days during the same year. After allocating the expenses between personal and rental use, the following rental loss was determined:  How should Mike and Pam report the rental income and expenses for last year?
A) Report the $100 loss for AGI. 
B) Include the $700 in gross income, but no deductions are allowed. 
C) Only expenses up to the amount of $700 rental income may be deducted. 
D) Report the interest $300) and taxes $250) as itemized deductions and the other expenses for AGI. 
E) No reporting for the rental activity is necessary.

Quizplus · Accepted Answer

The Answer of Mike and Pam own a cabin near Teluride, Colorado. In the current year the cabin was rented for 8 days to friends. Mike and Pam used the cabin a total of 82 days during the same year. After allocating the expenses between personal and rental use, the following rental loss was determined:  How should Mike and Pam report the rental income and expenses for last year?
A) Report the $100 loss for AGI. 
B) Include the $700 in gross income, but no deductions are allowed. 
C) Only expenses up to the amount of $700 rental income may be deducted. 
D) Report the interest $300) and taxes $250) as itemized deductions and the other expenses for AGI. 
E) No reporting for the rental activity is necessary.

Mike and Pam Own a Cabin near Teluride, Colorado