Question
Please help with these questions, thank you Review the following scenario. Use the information provided to answer questions about the taxpayer's 2022 return. Liam Hernandez
Please help with these questions, thank you
Review the following scenario. Use the information provided to answer questions about the taxpayer's 2022 return.
Liam Hernandez (38) paid $112,000 for a single-family home in Eugene, Oregon on July 1, 2022 and immediately placed it into service as a residential rental property. At the time, the land was valued at $10,000. The property generated $6,000 in rental income for the year. Liam's only expenses consisted of depreciation, $500 in insurance, and $750 in real estate taxes.
To finance the purchase, Liam sold his townhouse in Corvallis, Oregon, which was his principal residence since March 2019, for $98,150.
Liam is not a real estate professional, but he does actively participate in his rental real estate activity. He did not provide any personal services during the year, although he has notified his tenant that he will make minor repairs to the property as needed. Liam has no other passive income or losses.
Question: What amount should Liam claim for depreciation on his rental property for 2022? You may refer to the depreciation Table A-6 from IRS Publication 946, How to Depreciate Property, to assist you in answering this question. The table is shown below.
$1,700
$1,867
$3,555
$3,903
Question: What amount should Liam report as his net profit from rental real estate on the bottom line of Schedule E? His partially completed Schedule E, Supplemental Income and Loss, is shown below. Liam had a tenant ready to move in the next day. You may use the form to assist you in answering this question.
$2,883
$3,050
$4,750
$6,000
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