Stephen and Joy own a duplex in Newport Beach,CA.They live in one unit and rent the other to another couple.Their rental income for the year was $24,000.They incurred the following expenses for the entire duplex: What amount of net income from the duplex should Stephen and Joy report for the current year?

Question

Stephen and Joy own a duplex in Newport Beach,CA.They live in one unit and rent the other to another couple.Their rental income for the year was $24,000.They incurred the following expenses for the entire duplex:  What amount of net income from the duplex should Stephen and Joy report for the current year?

Quizplus · Accepted Answer

To calculate the net income from the duplex, we need to subtract the total expenses from the rental income. We are given that the rental income is $24,000. The total expenses for the duplex are the sum of the specific expenses listed, which is $11,300. So, the net income would be $24,000 - $11,300 = $12,700. However, since Stephen and Joy own the duplex jointly, they would each report half of the net income, which is $6,350. Therefore, the total net income to be reported by Stephen and Joy for the current year would be $6,350 x 2 = $16,700. Therefore, the best choice is C.

Stephen and Joy Own a Duplex in Newport Beach,CA