Rental Activity Commercial Building

Pedro owns a commercial building located in Arecibo, Puerto Rico. During 2021, the building was rented throughout the year. The rental activity was started by the taxpayer on July 1, 2016. The result of the rental operations, under the cash method and on a tax basis, was as follows:

Rental Income: $24,000 (not reported in 480s)

Repairs and maintenance 8,500

Professional services 9,000

Taxes on real property 1,500

Electricity 3,500

Aqueduct and sewers 1,800

Other 2,000

depreciation? 3

The business meets all the requirements to claim all of its expenses for purposes of the regular tax and the alternate basic tax. Submitted the Agreed-Upon Procedures (AUP).

1. Requirements: Calculate

a. the net income (loss) of Medical Equipment & Supply.

b. Sugar Bakery's net income (loss).

c. the deduction for depreciation for the property used in the rental activity.

d. the net income (loss) from the rental activity.

and. adjusted gross income for marriage in 2021.

F. the net income subject to tax for the marriage in 2021.

g. the normal tax, the preferential rate tax and the total income tax.

h. the income tax payable or the refund to be received.