Question
Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Insurance $3,800 Mortgage interest
Alexa owns a condominium near Cocoa Beach in Florida. This year, 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. Alexas 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 eight days of personal use. Also assume that Alexa receives $43,000 of gross rental receipts. 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. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Amounts to be deducted should be indicated with a minus sign.) |
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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. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. Amounts to be deducted should be indicated with a minus sign.) |
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c. | Would Alexa be better or worse off after taxes in the current year if she uses the Tax Court method of allocating expenses? | ||||
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