Emil Gow owns a two-family house that has two identical apartments. Gow lives in one apartment and rents out the other. In 2007, the rental apartment was fully occupied and Gow received $7,200 in rent. During the year ended December 31, 2007, Gow paid the following:

Real estate taxes

$6,400

Painting of rental apartment

800

Annual fire insurance premium

600

In 2007, depreciation for the entire house was determined to be $5,000. What amount should Gow include in his adjusted gross income for 2007?

  1. $2,900
  2. $ 800
  3. $ 400
  4. $ 100