Tyler has rented a house from Camarah since last year. The rent is usually $1,200 per month, but Camarah reduced the monthly rent down to $200 for all twelve months this year in exchange for Tyler putting in an inground pool in the backyard. The improvement has a fair market value of $20,000. How much total rental income must Camarah report this year?

Question

Quizplus · Accepted Answer

Camarah must report the fair market value of the improvement ($20,000) plus the actual rent received ($200 x 12 = $2,400), totaling $22,400 as rental income.

Tyler Has Rented a House from Camarah Since Last Year