Question
Lourdess mother, Maria, died on July 2, 2015, leaving Lourdes her entire estate. Included in the estate was Marias residence (325 Oak Street, Cincinnati, Ohio
Lourdess mother, Maria, died on July 2, 2015, leaving Lourdes her entire estate. Included in the estate was Marias residence (325 Oak Street, Cincinnati, Ohio 45211). Marias basis in the residence was $30,000. The fair market value of the residence on July 2, 2015, was $155,000. The property was distributed to Lourdes on January 1, 2016. The Gonzaleses have held the property as rental property and have managed it themselves. From 2016 until June 30, 2020, they rented the house to the same tenant. The tenant was transferred to a branch office in California and moved out at the end of June. Since they did not want to bother finding a new tenant, Armando and Lourdes sold the house on June 30, 2020. They received $140,000 for the house and land ($15,000 for the land and $125,000 for the house), less a 6 percent commission charged by the broker. They had depreciated the house using the MACRS rules and conventions applicable to residential real estate. To compute depreciation on the house, the Gonzaleses had allocated $15,000 of the propertys basis to the land on which the house is located. The Gonzaleses collected rent of $1,000 a month during the six months the house was occupied during the year. You may assume that the rental activity is considered an investment activity (not a trade or business). They incurred the following related expenses during this period:
Property insurance $500
Property taxes 800
Maintenance 465
Depreciation (to be computed) _____
How would you fill out a 2020 Form 1040 Schedule E document?
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