Jack and Cheryl Own a Cabin near Copper Mountain,Colorado

question 98

Multiple Choice

Jack and Cheryl own a cabin near Copper Mountain,Colorado.During the year,Jack and Cheryl rent the cabin for 30 days to friends for $1,800.Jack and Cheryl use the cabin a total of 60 days during the year.After making the appropriate allocation of planned expenses between personal and rental use,the following rental loss was determined: ​
How should Jack and Cheryl report the rental income and expenses for the forthcoming year?
I.Only expenses up to the amount of $1,800 rental income may be deducted for the year.
II.Only depreciation in the amount of $100 may be deducted.
III.The amount of the disallowed depreciation deduction ($300) can be carried forward.
IV.Nothing needs to be reported.
​

• A)Only statement I is correct.
• B)Statements II and III are correct.
• C)Statements I, II and III are correct.
• D)Statements III and IV are correct.
• E)Statements I, II, III, and IV.

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