Hoyt rented office space two years ago to Harris, receiving the first and last months' rent plus a security deposit of $1,000. In early January of this year, Harris moves and Hoyt refunds $250 of the deposit and keeps the remainder to cover $500 which is spent for repairs to the office space and one week of unpaid rent that amounts to $250. How would this information be reflected on Hoyt's tax return this year?
A. $750 income and no deduction
B. $750 income and $500 deduction
C. $250 income and $500 deduction
D. No income is recognized, but a $250 deduction is allowed.
Answer: B
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