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In 2021, Taxpayer A owned: i) a principal residence; and ii) a small boutique motel. Taxpayer A used his principal residence for personal purposes for

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In 2021, Taxpayer A owned: i) a principal residence; and ii) a small "boutique" motel. Taxpayer A used his principal residence for personal purposes for 200 days during the year (he rented it out to a movie production company for 16 days at $1,000 a day and it sat empty and unused for 365-200-16 days.) Taxpayer A had the following rental expenses: Category I... $13,000; Category II... $26,000; Category III... $12,000. Taxpayer A also owned a motel. He rented out his motel to unrelated parties at fair market value rent for 365 days during the year; accordingly, he had no personal use of his motel during 2021. Taxpayer A received $224,000 in rental income in 2021. Q5: T/F Under IRC Section 280A, by definition, a principal residence cannot be subject to the vacation home rules. (Answer "True" or "False"). Q6: T/F For purposes of IRC Section 280A, that portion of a unit which is used exclusively as a hotel or motel will fall outside of the definition of a "dwelling unit". (Answer "True" or "False"). Q7: What is the relevant portion of IRC Section 280A that is often used to "test" whether a taxpayer has too much personal use of his (or her) rental property in a given year? (Explain how this test works in a sentence or two and "copy and paste" the relevant portion(s) of IRC Section 280A.) Q8: The so-called "Bolton Rule" relates to an allowable method for a taxpayer to allocate "Category I" rental expenses (mortgage interest expense, property tax expense, casualty losses) to offset rental income. The Bolton Rule is an example of which source of the tax law? Q9: T/F In 2021, Taxpayer B placed in service a vacation home with 120 days of rental use and 40 days of personal use. In 2021, Taxpayer B will claim the standard deduction. In this situation, Taxpayer B should not use the Bolton Rule to allocate "Category I" rental expenses to offset rental income. (Answer "True" or "False")

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