Question
Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Insurance$1,270Advertising expense710Mortgage interest6,300Property taxes1,150Repairs
Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:
Insurance$1,270Advertising expense710Mortgage interest6,300Property taxes1,150Repairs & maintenance800Utilities840Depreciation10,950
During the year, Natalie rented out the condo for 98 days, receiving $31,250 of gross income. She personally used the condo for 40 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 theTax Courtmethod of allocating expenses to rental use of the property. Assume 366 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 offorAGI (rental) deductions Natalie may deduct in the current year related to the condo (assuming she itemizes deductions before considering deductions associated with the condo)?
b.What is the total amount of itemized deductions Natalie may deduct in the current year related to the condo?
c.If Natalie's basis in the condo at the beginning of the year was $168,000, what is her basis in the condo at the end of the year?
d.Assume that gross rental revenue was $4,250 (rather than $31,250). What amount offorAGI deductions may Natalie deduct in the current year related to the condo?
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