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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
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 "O". a. What effect does the rental of the vacation cabin have on Piper's AGI? Piper reports rental income of $ and rental expenses of $ for AGI. 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 b. Insurance $ c. Property Taxes d. Mortgage interest Maintenance e. expenses
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