Question
Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Note that the home
Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:
Note that the home is considered to be a nonresidence with rental use. During the year, Alexa rented out the condo for 154 days. She did not use the condo at all for personal purposes during the year. 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 154 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $42,000 of gross rental receipts and her itemized deductions exceed the standard deduction before considering expenses associated with the condo. 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.)
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 final answers to the nearest whole dollar amount.)
Insurance Mortgage interest Property taxes Repairs & maintenance Utilities Depreciation $ 4,500 7,000 2,400 1,190 5,100 20,800 $ 42,000 Gross rental income Expenses: Insurance Mortgage interest Property taxes Repairs & maintenance Utilities Depreciation Total expenses Balance-net rental income Total "for AGI" deductions 0 From AGI deductionsStep by Step Solution
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