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NEW QUESTION: 1
Joe is attempting to import an invalid value into a picklist field. The import wizard will respond with an error message.
NEW QUESTION: 2
Barkley owns a vacation cabin that was rented to unrelated parties for 10 days during the year for $2,500.
The cabin was used personally by Barkley for three months and left vacant for the rest of the year.
Expenses for the cabin were as follows:
Real estate taxes $1,000
Maintenance and utilities $2,000
How much rental income (loss) is included in Barkley's adjusted gross income?
RULE: If a vacation residence is rented for less than 15 days per year, it is treated as a personal
residence. The rental income is excluded from income, and mortgage interest (first or second home) and
real estate taxes are allowed as itemized deductions. Depreciation, utilities, and repairs are not
Choice "a" is correct. Applying the rule above, if a vacation residence is rented for less than 15 days per
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income. A Schedule E is not filed for this property (i.e., no income is reported, the taxes are reported as
itemized deductions, and the maintenance and utilities are not deductible), so the effect on AGI is zero.
Choice "b" is incorrect. This assumes that the property taxes are reported as itemized deductions but that
the rental income ($2,500) less the maintenance and utilities ($2,000) are reported net on Schedule E.
Per the above RULE, the rental income is excluded from income, and the maintenance and utilities are
Choice "c" is incorrect. This assumes that all of the items shown are reported net on the Schedule
E-$2,500 - $1,000 - $2,000 = ($500). Per the above RULE, the rental income is excluded from income, the
maintenance and utilities are not deductible, and the property taxes are reported on Schedule A as an
Choice "d" is incorrect, per the above rule and discussion.
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