Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Natalie owns a condominium near Cocoa Beach in Florida. In 2021, she incurs the following expenses in connection with her condo: Insurance $ 1,350 Advertising

Natalie owns a condominium near Cocoa Beach in Florida. In 2021, she incurs the following expenses in connection with her condo:

Insurance $ 1,350
Advertising expense 735
Mortgage interest 5,050
Property taxes 1,110
Repairs & maintenance 1,120
Utilities 1,440
Depreciation 12,200

During the year, Natalie rented out the condo for 85 days, receiving $22,750 of gross income. She personally used the condo for 39 days during her vacation. Natalie's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxes allocated to the rental use of the property.

Assume Natalie uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the current year. (Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount.)

a. What is the total amount of itemized deductions Natalie may deduct in the current year related to the condo?

Itemized deductions ____________

b. If Natalies basis in the condo at the beginning of the year was $178,000, what is her basis in the condo at the end of the year?

Basis in the condo _____________

c. Assume that gross rental revenue was $4,550 (rather than $22,750). What amount of for AGI deductions may Natalie deduct in the current year related to the condo?

For AGI deductions _____________

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_2

Step: 3

blur-text-image_3

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

Financial Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

2nd Edition

0471347744, 978-0471347743

More Books

Students explore these related Accounting questions