Rick and Debbie Siravo own a beachfront home in Wrightsville Beach, N.C. During the year, they rent it for 20 weeks (140 days) at $1,100 per week and use it 10 days for personal purposes. Rick actively participates in the management of the property, but does not qualify as a real estate professional. Their adjusted gross income for the year is $137,200 and the costs of maintaining the home for the year are:

Complete Form 1040 Schedule E and Form 8582 using the above information. Rick’s Social Security number is 036-87-1458, Debbie’s Social Security number is 035-11-
4856, and the address of the home is 435 Beachway Lane, Wrightsville Beach, NC 28480. Forms and instructions can be downloaded from the IRS Web site (www.irs .gov/formspubs/index.html).

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Mortgage interest $15,500 Real property taxes 4,500 Management fee 1,085 Insurance 1,200 Utilities 2,200 Cleaning service (only for rental 1,500 period) Repairs and maintenance 700 Depreciation (unallocated) 8,500