Net Rental Income
Response to the following problem:
Sandee, a cash basis taxpayer, owns a house with two identical units. Sandee resides in one unit and rents out the other. The tenant made timely monthly rental payments of $500 for the months of January through November 2014. The tenant paid rents for December 2014 and January 2015 on January 5, 2015. During the year, Sandee paid $3,600 for utilities and $600 for insurance. These expenses were for the entire house. She paid $400 for maintenance and repairs on the rental unit. Depreciation on the entire house equals $3,000. Compute Sandee's 2014 net rental income.