Josh owns rental residential real estate. He asked his tenants to pay his son, Tom, the monthly rent. Tom has been a good son and needs money to fund his weekend parties. Neither Tom nor Josh paid any rental property related expenses in 2018. The rental payments for 2018 totaled $32,000, all paid to Tom. The federal income tax consequences of this transaction are:

1. include $32,000 in gross income of Josh, deduction for AGI equal to $32,000 for Josh, include $32,000 in gross income of Tom

2. include $32,000 in gross income of Tom

3. include $32,000 in gross income of Josh, exclude $32,000 from gross income of Tom

4. include $32,000 in gross income of Josh, deduction from AGI equal to $32,000 for Josh, include $32,000 in gross income of Tom

5. include $16,000 in gross income of Josh