Leslie and Devin Own a Beach Cottage That They Rented

Multiple Choice

Leslie and Devin own a beach cottage that they rented 30 days for $4,500.They used the cottage for personal use for 45 days during the year.The allocated expenses related to the cottage total $6,000,resulting in a net loss of $1,500 for this rental activity.What is the proper tax treatment of these amounts by Leslie and Devin?

A) Report net income of $4,500 on Schedule E.
B) Report net loss of $1,500 on Schedule E.
C) None of the amounts have to be reported.
D) Report income and expenses on Schedule E but expenses cannot exceed income.