Problem 6-46 (LO. 3)

Piper owns a vacation cabin in the Tennessee mountains. Without considering the cabin, she has gross income of $65,000. During the year, she rents the cabin for two weeks for $2,500 and uses it herself for four weeks. The total expenses for the year are $10,000 mortgage interest; $1,500 property tax; $2,000 utilities, insurance, and maintenance; and $3,200 depreciation.

If an amount is zero, enter "0".

Question Content Area

a. What effect does the rental of the vacation cabin have on Piper's AGI?

Piper reports rental income of $fill in the blank 774701013ff2003_1 and rental expenses of $fill in the blank 774701013ff2003_2 for AGI.

Question Content Area

b. What expenses can Piper deduct, and how are they classified (i.e., for or from AGI)?

Note: Assume that she itemizes her deductions.

a.	Utilities	$fill in the blank cbf29801800103c_1	For AGIFrom AGINot deductible
b.	Insurance	$fill in the blank cbf29801800103c_3	For AGIFrom AGINot deductible
c.	Property Taxes	$fill in the blank cbf29801800103c_5	For AGIFrom AGINot deductible
d.	Mortgage interest	$fill in the blank cbf29801800103c_7	For AGIFrom AGINot deductible
e.	Maintenance expenses	$fill in the blank cbf29801800103c_9	For AGIFrom AGINot deductible