Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alexa owns a condominium near Cocoa Beach in Florida. In 2 0 2 3 , she incurs the following expenses in connection with her condo:

Alexa owns a condominium near Cocoa Beach in Florida. In 2023, she incurs the following expenses in connection with her condo:
Insurance $ 3,800
Mortgage interest 11,200
Property taxes 3,800
Repairs & maintenance 950
Utilities 3,700
Depreciation 19,100
During the year, Alexa rented out the condo for 170 days. Alexa's AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income.
Assume that in addition to renting the condo for 170 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $43,000 of gross rental receipts, her itemized deductions exceed the standard deduction before considering expenses associated with the condo, and her itemized deduction for nonhome business taxes is less than $10,000 by more than the real property taxes allocated to rental use of the home. Answer the following questions:
a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.
b. What is the total amount of from AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.
c. Would Alexa be better or worse off after taxes in the current year if she uses the Tax Court method of allocating expenses?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Fundamentals Of Cost Accounting

Authors: William N. Lanen, Shannon Anderson, Michael W. Maher

7th Edition

1265117705, 9781265117702

More Books

Students also viewed these Accounting questions

Question

Explain the factors that influence peoples values.

Answered: 1 week ago