Question
Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Insurance. $2,100 Mortgage interest.
Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:
Insurance. $2,100
Mortgage interest. 9,300
Property taxes 3,300
Repairs & maintenance600
Utilities 3,300
Depreciation 15,800
During the year, Alexa rented out the condo for 158 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 158 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $40,750 of gross rental receipts and her itemized deductions exceed the standard deduction before considering expenses associated with the condo, and that her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to rental use of the home. Answer the following questions:
Note that the home is considered to be a nonresidence with rental use.
a.What is the total amount offorAGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.
Gross rental income$. 40,750
Expenses:
Insurance. $1,999
Mortgage interest. 8,852
Property taxes. 3,141
Repairs & maintenance 571
Utilities. 3,141
Depreciation. 15,039
Total expenses 32,743
Balancenet rental income. $8,007
Total "for AGI" deductions$. 32,743
These numbers are from taking the expense and multiplying it by Total rental days/total days used. (the IRS method)
For example, insurance expense 2100(158 days/166 days) = 1999 rental insurance expense.
I'm having trouble finding part b, from AGI deductions.
b.What is the total amount offromAGI 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 answer to the nearest whole dollar amount.)
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