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