Eddie and Camilla received $11,600 for the rental of their rental house in Irvine,California.Eddie and Camilla do not use this property for personal use.The rent covers six months from October 1 of the current year to March 31 of next year.The amount also includes a security deposit of $2,000.How much should Eddie and Camilla report as rental income in the current tax year?

Question

Quizplus · Accepted Answer

Eddie and Camilla should report the rental income for the months covered in the current tax year. The rent covers October, November, and December of the current year, which is 3 months. The monthly rent is ($11,600 - $2,000) / 6 = $1,600. Therefore, for 3 months, they should report 3 * $1,600 = $4,800. However, the security deposit is not included as income unless it is used for rent or damages, so the correct amount to report is $4,800.

Eddie and Camilla Received $11,600 for the Rental of Their