Jame and Jessica own a house at the beach. The house was rented to unrelated parties for 8 weeks during 2017. Mary and the children used the house 18 days for their vacation during the year. After Properly allocating the expenses between rental and personal use, it was determined that a loss was incurred as follows:

Gross rental income $5000

Less: Mortgage interest and property taxes $5500

Other allocated expense $1000

Net rental loss $(1500)

What is the correct treatment of the rental income and expenses on Jame and Jessicas joint income tax return for 2017?

a) Since the house was used less than 50% personally by Jame and Jessica, all expenses allocated to personal use may be deducted.

b) Jame and Jessica should include none of the income or expenses related to the beach house in their 2016 income tax return.

c) A $1500 loss should be reported.

d) Only the interest and taxes should be deducted.

e) Since the house was used more than 14 days personally by Jame and Jessica, the rental expenses (other than interest and taxes) are limited to the gross rental income in excess of deductions for interest and taxes allocated to the rental use.