Kenneth Lived in His Home for the Entire Year Except

question 54

Multiple Choice

Kenneth lived in his home for the entire year except for when he rented his home (near a very nice ski resort) to a married couple for 14 days in December. The couple paid Kenneth $14,000 in rent for the two weeks. Kenneth incurred $1,000 in direct expenses relating to the home for the 14 days. Which of the following statements accurately describes the manner in which Kenneth should report his rental receipts and expenses for tax purposes?

• A)Kenneth would include the rental receipts in gross income and deduct the rental expenses for AGI.
• B)Kenneth would exclude the rental receipts from gross income and deduct the rental expenses for AGI.
• C)Kenneth would include the rental receipts in gross income and would not deduct the rental expenses because he used the residence for personal purposes for most of the year.
• D)Kenneth would exclude the rental receipts, and he would not deduct the rental expenses.

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Definitions:

Random Number Intervals

The use of numbers generated randomly within specified ranges to simulate variability in statistical models or sampling.

Cumulative Probability

The probability that a variable takes on a value less than or equal to a specific value.

Interval of Random Numbers

A range within which any number has an equal chance of being selected during a random selection process.

Average Demand

The mean amount of a product or service consumed or requested by customers over a specific period.