Question

To determine effective gross income, one would deduct which of the following from gross income? Select one:

a. Property taxes
b. Income taxes on the profit
c. Payments on principal and interest
d. A vacancy and collection loss factor

Answer 1

To determine effective gross income, one would deduct a vacancy and collection loss factor from the gross income.

Step-by-step explanation:

Effective gross income is calculated by deducting certain expenses from the gross income. In this case, the correct deduction from gross income to determine effective gross income would be d. A vacancy and collection loss factor. This factor takes into account expected vacancies and losses in rental income, which are subtracted to give a more accurate representation of income.