Question
Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Insurance $ 1,050 Advertising
Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:
Insurance | $ | 1,050 |
Advertising expense | 965 | |
Mortgage interest | 5,800 | |
Property taxes | 1,080 | |
Repairs & maintenance | 1,130 | |
Utilities | 550 | |
Depreciation | 8,700 | |
|
During the year, Natalie rented out the condo for 94 days, receiving $22,500 of gross income. She personally used the condo for 50 days during her vacation.
Assume Natalie uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the current year.
a. What is the total amount of for AGI (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 Natalies basis in the condo at the beginning of the year was $210,000, what is her basis in the condo at the end of the year?
d. Assume that gross rental revenue was $4,500 (rather than $22,500). What amount of for AGI deductions may Natalie deduct in the current year related to the condo?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started