Question

Noah owned a cottage on the lake that he bought in year 1. in year 2, he rented the cottage for 10 days to a stranger and used the cottage for 20 days for his own personal use. the cottage was not used the rest of the year. noah had rental income of $1,000, and he paid $600 for repairs. how should he report these activities on his year 2 return?

Answer 1

Answer:

He should report these activities as 1000 income and 600 expense.

Explanation:

Any inflow of benefit whether in shape of cash or in kind is income and any amount spend other than the amount spend on thing that can be classified as asset is categorized as expense.

keeping this thing in mind Noah shall classify 1000 as income or revenue and 600 as expense leading to net profit of 400 dollars.