44. Apply the Internal Revenue Code deduction disallowance provisions associated with the following: public policy limitations, political activities, excessive executive compensation, investigation of business opportunities, hobby losses, vacation home rentals, payment of others expenses, personal expenditures, capital expenditures, related-party transactions, business interest expense, and expenses related to tax-exempt income. Piper owns a vacation cabin in the Tennessee mountains. Without considering the cabin, she has gross income of $65,000. During the year, she rents the cabin for two weeks for $2,500 and uses it herself for four weeks. The total expenses for the year are $10,000 mortgage interest; $1,500 property tax; $2,000 utilities, insurance, and maintenance; and $3,200 depreciation.
    1. What effect does the rental of the vacation cabin have on Pipers AGI?
    2. What expenses can Piper deduct, and how are they classified (i.e., for or from AGI)?

Apply the Internal Revenue Code deduction disallowance provisions associated with the following: public policy limitations, political activities, excessive executive compensation, investigation of business opportunities, hobby losses, vacation home rentals, payment of others expenses, personal expenditures, capital expenditures, related-party transactions, business interest expense, and expenses related to tax-exempt income. Adelene, who lives in a winter resort area, rented her personal residence for 14 days while she was visiting Brussels. Rent income was $5,000. Related expenses for the year were as follows:

Real property taxes	$ 3,800
Mortgage interest	7,500
Utilities	3,700
Insurance	2,500
Repairs	2,100
Depreciation	15,000

Determine the effect on Adelenes AGI.