Hugh and Mary Own a Cabin in Big Bear That

Multiple Choice

Hugh and Mary own a cabin in Big Bear that they rented for 45 days at $4,500.They used the cabin for personal use for 30 days during the year.The allocated expenses related to the cabin of $6,000 resulted in a net loss of $1,500 for this rental activity.What is the proper tax treatment of these amounts by Hugh and Mary?

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