Kenneth Lived in His Home for the Entire Year Except

question 7

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 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:

External Locus

The belief that external forces, rather than personal actions, control one’s life and outcomes.

Socialized Power Motivation

It describes a drive to use power for the benefit of others or the collective, rather than for personal gain.

Personal Integrity

Adherence to moral and ethical principles, demonstrating honesty and consistency in actions and values.

Stress Tolerance

The ability to remain calm, composed, and effective in challenging or stressful situations, without succumbing to pressure.