Question
Josh rented a house to Melinda. While Josh was out of the country during the month of November, a slow leaking pipe burst in the
Josh rented a house to Melinda. While Josh was out of the country during the month of November, a slow leaking pipe burst in the house Melinda was renting. Melinda paid the following expenses related to the water damage:
Plumbing repair $950 Carpet cleaning to remove excess water $400 Upholstery cleaning to remove excess water from Melinda's furniture $350 Replacement of Melinda's television ruined by the water $450
The water damage was not covered by Josh's insurance because it was determined that Josh was aware of the slow leak (he had repaired it several times). The pipe burst due to the weakened condition of the repaired area. Melinda's renters' insurance covered the damages and cleaning expenses for her personal items. Instead of reimbursing Melinda, Josh decided to deduct any amount he owed her from rent. What amount, if any, is Josh required to report as income on his return?
a) $2,150 b) $1,800 c) $1,350 d)$ 0
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