James owns a home in Lake Tahoe, Nevada, that he rented for $6,300 for 40 days during the summer. He lived there for a total of 120 days, and the rest of the year the house was vacant. The expenses for the home included $6,850 in mortgage interest, $1,240 in property taxes, $1,980 in maintenance and utilities, and $3,690 in depreciation. What is his net income or loss from the rental of his home (without considering the passive loss limitation)? Use the IRS method for allocation of expenses.

Multiple Choice

• $0.

• $7,460 net loss.

• $6,300 net income.

• $2,860 net income.