Charles and Sarah Own a Home in Palm Springs,CA

Multiple Choice

Charles and Sarah own a home in Palm Springs,CA.During the year,they rented the house for 40 days for $5,000 and used it for personal use for 18 days.The house remained vacant for the remainder of the year.The expenses for the house included $16,000 in mortgage interest,$4,500 in property taxes,$1,000 in utilities,$1,200 in maintenance,and $9,800 in depreciation.What is the deductible loss for the rental of their home (without considering the passive loss limitation) ? Use the Tax Court method for allocation of expenses.

A) $0
B) $5,000 net income
C) $17,414 net loss
D) $27,500 net loss