Bill Is the Owner of a House with Two Identical

question 3

Multiple Choice

Bill is the owner of a house with two identical apartments. He resides in one apartment and rents the other apartment to a tenant. The tenant made timely monthly rental payments of $550 per month for the months of January through December 2015. The following expenses were incurred on the entire building: In addition, depreciation allocable to the rented apartment is $1,500. What amount should Bill report as net rental income for 2015?

• A)$0
• B)$100
• C)$1,400
• D)$2,600
• E)None of the above

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Definitions:

Form 1040EZ

A simplified tax form for individuals with uncomplicated tax situations, no longer in use as of the 2018 tax year.

Interest Income

Income earned from deposit accounts or investments through the receipt of interest.

Dependent

A person, often a child or other family member, whose financial support and well-being are the responsibility of another, often affecting tax deductions.

Litigated Tax Disputes

Tax disagreements that have been brought before a court for resolution.