Question

This year, he received $7,000 revenue from the tenants and incurred $4,900 rental expenses. Mr. Moyer must include $7,000 in gross income and is allowed $4,900 of itemized deductions for the expenses.

A. True
B. False

Answer 1

B. False

Step-by-step explanation:

a) Data and Calculations:

The gross income from rent = $7,000

Rental expenses = $4,900

Net income from rent = $2,100

b) Rental expenses are business expenses. They are not part of itemized deductions. They are usually subtracted before arriving at the adjusted gross income (AGI) from which itemized deductions are then made. Therefore, there is no requirement to itemize the rental expenses.