Mort is the owner of an apartment building containing ten identical apartments.Mort resides in one apartment and rents out the remaining units.For 2013,the following information is available: $\begin{array}{ll}
\text { Gross rents } & \$ 21,600 \
\text { Utilities for total building } & \$ 2,500 \
\text { Maintenance and repairs (rental apartments only) } & \$ 1,200 \
\text { Advertising for vacant apartments } & \$ 300 \
\text { Depreciation of building (all ten units) } & \$ 5,000
\end{array}$ What amount should Mort report as net rental income for 2013?

Question

Quizplus · Accepted Answer

To calculate net rental income, subtract the expenses related to the rental units from the gross rents. Expenses include utilities (90% of $2,500 = $2,250), maintenance and repairs ($1,200), advertising ($300), and depreciation (90% of $5,000 = $4,500). Net rental income = $21,600 - ($2,250 + $1,200 + $300 + $4,500) = $13,350.

Mort Is the Owner of an Apartment Building Containing Ten