Ryan owns a lake house. He used it as a vacation home most weekends during the current tax year, but he occasionally rented it out when he could not get away. Under what circumstances Ryan would be required to report this rental income on his tax return?

1. He only needs to report the income if the amount of rent he received was equal to or greater than fair rental value for this type of property
2. He only needs to report the income if the number of days he rented the property exceed 10% of the days he used it personally
3. He only needs to report the income if rented the house for 15 days of more during the year.
4. No special rules apply. He must always report all the rental income received