Georgia owns a home in Colorado that she rents for $1,200 per month (she does not use the home personally).While she was in Europe in November,the roof in her rental home leaked and her tenant repaired it for $900.For the following month's rent (December),her tenant paid her $300 for rent ($1,200 - $900).What amounts should Georgia include for rental income and repair expense,respectively,for December?

Question

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$1,200;$900Georgia should include the full rent amount of $1,200 as rental income because the reduction in rent due to the repair is considered a payment for the repair on her behalf. She can also include the $900 repair expense, as it was a necessary expense for maintaining the property.

Georgia Owns a Home in Colorado That She Rents for $1,200