Claire and Harry Own a House on Hilton Head Island

question 38

Multiple Choice

Claire and Harry own a house on Hilton Head Island.During the year,Claire and Harry rent the house for 30 days to friends from Texas for $2,000.Claire and Harry use the house a total of 60 days during the year.After making the appropriate allocation of expenses between personal and rental use,the following rental loss was determined:
$$\begin{array} { l r } \text { Rental income } & \$ 2,000 \\\text { Property taxes } & ( 250 ) \\\text { Mortgage interest } & ( 950 ) \\\text { Repairs and maintenance } & ( 200 ) \\\text { Utilities } & ( 300 ) \\\text { Depreciation } &\underline { ( 400 ) }\\\text { Rental loss } & \$ ( 100 ) \end{array}$$
How should Claire and Harry report the rental income and expenses for the forthcoming year?
I.Report the $100 loss for AGI.II.Only expenses up to the amount of $2,000 rental income may be deducted for the year.
III.Include the $2,000 in gross income,but no deductions are allowed.
IV.Nothing needs to be reported.

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

Understand the structure and function of the gastrovascular cavity across different animal taxa.

Recognize the defensive mechanisms of cnidarians, specifically nematocysts.

Identify relationships among protists and their closest animal relatives.

Understand the distinctive features of various animal phyla, including molluscs, annelids, arthropods, and echinoderms.

---

Definitions:

Annually

Refers to something that happens once every year.

Simple Interest

Interest figured solely on the initial sum, excluding any compounded amounts.

Maturity Value

The amount that will be received at the end of a fixed-term investment, including the principal and any accumulated interest.

Initial Amount

The starting amount of money before any growth or shrinkage due to interest or losses.