Gregory owns a rental house, which he rents at $200 per month. Similar houses in

Question

Gregory owns a rental house, which he rents at $200 per month. Similar houses in the neighborhood rent for $600 per month. As Gregory's Tax Professional, how should you treat his rental income?

A)The income is reported, and all expenses deducted, on Schedule E.

B)The income is not reported because Gregory is operating the property as a charity.

C)The income is reported on Form 1040, line 21, and rental expenses, up to the amount of income, are deducted on Schedule A.

D)A charitable contribution of $400 is reported on Schedule A for every month Gregory rents the property at $200

Explanation / Answer

Gregory owns a rental house, which he rents at $200 per month. Similar houses in the neighborhood rent for $600 per month. The income is reported on Form 1040, line 21, and rental expenses, up to the amount of income, are deducted on Schedule A.

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