Conrad purchases a condominium in Aspen, Colorado. Because of his hectic work schedule, Conrad is unsure how much he will be able to use the condo over the next few years. A friend of his who has a condo in Aspen tells him that the condominium is both a great investment and an excellent tax shelter. Conrad’s friend has been able to rent his condominium for $1,000 per week. Conrad expects to incur the following expenses related to the condominium:

Conrad is somewhat hesitant to rent his new condo out for the entire year, just in case he can sneak away from work for a few days. Therefore, he wants to explore all his options. Explain the different tax treatments of his condominium expenses depending on the number of days he uses it.

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Home mortgage interest $16,000 Real property taxes 5,500 Insurance 825 Utilities 2,150 Condominium fee 2,400 Maintenance 300 Depreciation (unallocated) 6,500