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Hassad owns a rental house on Lake Tahoe. He uses a real estate firm to screen prospective renters, but he makes the final decision on

Hassad owns a rental house on Lake Tahoe. He uses a real estate firm to screen prospective renters, but he makes the final decision on all rentals. He also is responsi- ble for setting the weekly rental price of the house. During the current year, the house rents for $1,500 per week. Hassad pays a commission of $150 and a cleaning fee of

$75 for each week the property is rented. During the current year, he incurs the follow- ing additional expenses related to the property:

Mortgage interest

$12,000

Property taxes

2,700

Utilities

1,400

Landscaping fees

900

Repairs

450

Depreciation (unallocated)

7,500

a. What is the proper tax treatment if Hassad rents the house for only 1 week (7 days) and uses it 50 days for personal purposes?

b. What is the proper tax treatment if Hassad rents the house for 8 weeks (56 days) and uses it 44 days for personal purposes?

c. What is the proper tax treatment if Hassad rents the house for 25 weeks (175 days) and uses it 15 days for personal purposes?

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