Question
Please help me answer the following questions in correspondence with 2016 tax laws: In the current year, Sam Lett purchased a condominium in Hilton Head
Please help me answer the following questions in correspondence with 2016 tax laws:
In the current year, Sam Lett purchased a condominium in Hilton Head Island, South Carolina. Sam and his family used the condominium for a total of 30 days. The condominium was rented out a total of 70 days during the year, generating $9,000 of rental income. Sam incurred the following expenses:
Property taxes | $3,000 |
Mortgage interest | 1,000 |
Insurance | 1,000 |
Utilities | 1,000 |
Depreciation | 8,000 |
(a.) Determine Sam's deductible expenses using the IRS approach (Total Rental Days / Total Days Used)
(b.) How much depreciation can be deducted in the current year if the rental income was $12,000?
(c.) How much can deduct with regard to the interest and taxes on Schedule A?
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