Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Darren owns a building (at 200 Tobacco Road, Urbana, MN) rents it out under a commercial lease for the whole year, for part of the

Darren owns a building (at 200 Tobacco Road, Urbana, MN) rents it out under a commercial lease for the whole year, for part of the building.The commercial tenant pays its own share of maintenance and utilities.The tenant pays Darren $2,400 per month for the space.The Tenant also paid Darren $1,125 in October for the tenant's share of taxes. Darren's property taxes for the whole rental building is $3,500 (already mentioned) but Darren has not rented out the whole building.Most of the building is unoccupied.Darren has been trying to rent it out since then, by listing it, advertising it and by signage.The utilities and phone to the 1600 square feet are separately metered, so the tenant pays those amounts directly to Charter and Xcel.The tenant is responsible for its own janitorial and maintenance fees.According to your depreciation schedules, this year's depreciation is $7,692 MACRS.Use form 4562 to properly report the depreciation.

Darren's additional rental expenses are:

Mortgage interest10,000

Utilities3,750

Maintenance and janitorial3,000

Insurance1,000

He filed all required 1099s.

how do you treat for tax purpose? which form will be used to post it.?

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

Accounting Terminology

Authors: Michael P Griffin

1st Edition

1423229371, 9781423229377

More Books

Students also viewed these Accounting questions