Kenneth Lived in His Home for the Entire Year Except

question 76

Multiple Choice

Kenneth lived in his home for the entire year except 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:

Arthur Jensen

An American psychologist known for his work in psychometrics and intelligence testing, particularly in the study of racial differences in intelligence.

Ethnic Differences

Variations in behavior, customs, norms, and practices among different ethnic groups, often influenced by cultural, geographical, and historical contexts.

IQ

A measure of a person's intelligence as indicated by an intelligence test, expressed as a number relative to a statistical norm.

Genetic Factors

The hereditary components that contribute to the development of traits, behaviors, and diseases in an organism.