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:

Humanist

An advocate or follower of the principles of humanism, emphasizing the value and agency of human beings, individually and collectively, and generally preferring critical thinking and evidence over acceptance of dogma or superstition.

Prefrontal Lobotomy

A surgical procedure once used to treat mental disorders, involving the removal or destruction of part of the prefrontal cortex of the brain.

Drug Therapy

The treatment of disease or disorder through the administration of pharmaceutical drugs.

Behavior Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through conditioning and learning techniques.