nate and teddi own a house at the beach. they rented the house to unrelated parties for eight full weeks during the current year. nate and teddi used the house 16 days for their vacation during the year. after properly dividing the expenses between rental and personal use, a rental loss from the house was incurred as follows: gross rental income $6,400 less mortgage interest and property taxes ($7,000) less other allocated expenses (operating expenses of $400 and depreciation of $600) ($1,000) net rental loss ($1,600) what is the correct tax treatment of the rental income and expenses on nate and teddi's joint income tax return for the current year? a) the other allocated rental expenses deduction is limited to the gross rental income in excess of the deductions for interest and taxes allocated to the rental use. b) the $7,000 rental portion of mortgage interest and property taxes can be deducted. c) because the house was only 20% personally used by nate and teddi, all expenses allocated to personal use may be deducted. d) a $1,600 loss should be reported.