Hugh and Mary own a cabin in Big Bear that they rented for 45 days at $4,500.They used the cabin for personal use for 30 days during the year.The allocated expenses related to the cabin of $6,000 resulted in a net loss of $1,500 for this rental activity.What is the proper tax treatment of these amounts by Hugh and Mary?

Question

Quizplus · Accepted Answer

Hugh and Mary should report the rental income and expenses on Schedule E of their tax return. However, the expenses cannot exceed the rental income, which results in a net rental loss of $1,500. The personal use of the cabin by Hugh and Mary for 30 days should be excluded from the rental calculation.

Hugh and Mary Own a Cabin in Big Bear That