Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alexa owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo: Insurance $ 3,300 Mortgage

Alexa owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo:

Insurance $ 3,300
Mortgage interest 6,750
Property taxes 4,250
Repairs & maintenance 640
Utilities 4,200
Depreciation 20,400

During the year, Alexa rented out the condo for 180 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 180 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $40,250 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:

Required:

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.

Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.

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.

Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.

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

Step: 3

blur-text-image

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

Auditing Concepts For A Changing Environment With IDEA Software

Authors: Larry E. Rittenberg, Bradley J. Schwieger

4th Edition

0387321500, 978-0324180237

More Books

Students also viewed these Accounting questions

Question

How can you develop media literacy?

Answered: 1 week ago