The Super Bowl Is Played in Tasha's Home Town

question 69

Multiple Choice

The Super Bowl is played in Tasha's home town.Tasha moves out of her house for 10 days and stays with her parents.She rents her house for a very high fee to a crew from ESPN.With respect to this rental activity,Tasha will

• A)report the rental income but be allowed a deduction for AGI for the related expenses (e.g.,interest,taxes,utilities,depreciation).
• B)report the rental income but be allowed a deduction from AGI for the related expenses (e.g.,interest,taxes,utilities,depreciation).
• C)report the rental income,but she will not be allowed any deductions other than the mortgage interest and property taxes.
• D)not be required to report the income,but she will not take any deductions other than her normal mortgage interest and property taxes.

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Definitions:

Markdown Rate

The percentage decrease from the original price of an item to its new sale price.

Raisins

Dried grapes often used in cooking and baking or eaten as a snack.

Mark-up

The gap between the acquisition cost of a product or service and the price at which it's sold, calculated as a fraction of the initial cost.

Operating Profit

Income generated by the primary activities of a business before tax and interest deductions are taken into account.