Question 2 (8 points)

Unless stated differently use 2020 rate schedules and rules.

Tyson owns a condominium near Laguna Beach, California. During the year, Tyson rented the condo for 100 days receiving $20,000 of gross rent. He personally used the condo for 60 days. In 2020, he incurs the expenses listed below in connection with his condo. Tyson is deducting $4,000 of state and local income taxes (this does not include any real estate property taxes he is entitled to) as itemized deductions.

What is Tysons net rental income assuming (a) he uses the Tax Court method of allocating expenses and (b) he uses the IRS method of allocating expenses. How much is his itemized deduction for real estate property taxes under each method.

Mortgage Interest	$9,700
Property taxes	5,650
Repairs	3,250
Utilities	2,160
Maintenance	3,125
Advertising	1,280
Depreciation	11,560

Net rental income IRS Method
Net Rental Income Tax court Method

Itemized deduction for Real Estate Taxes IRS Method
Itemized Deduction for Real Estate Taxes Tax court Method

Show your work for any potential partial credit.

Expense	Amount	IRS Method	Tax court Method