Question
In: Accounting
Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses...
Alexa owns a condominium near Cocoa Beach in Florida. This year,
she incurs the following expenses in connection with her
condo:
| Insurance | $ | 3,350 |
| Mortgage interest | 6,650 | |
| Property taxes | 2,800 | |
| Repairs & maintenance | 860 | |
| Utilities | 2,600 | |
| Depreciation | 23,800 | |
During the year, Alexa rented out the condo for 134 days. Alexa’s
AGI from all sources other than the rental property is $200,000.
Unless otherwise specified, Alexa has no sources of passive income.
Assume there are 365 days in the year.
Assume that in addition to renting the condo for 134 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $49,750 of gross rental receipts. Answer the following questions: (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days. (Amounts to be deducted should be indicated with a minus sign.)
Alexa owns a condominium near Cocoa Beach in Florida. This year,
she incurs the following expenses in connection with her
condo:
| Insurance | $ | 3,350 |
| Mortgage interest | 6,650 | |
| Property taxes | 2,800 | |
| Repairs & maintenance | 860 | |
| Utilities | 2,600 | |
| Depreciation | 23,800 | |
During the year, Alexa rented out the condo for 134 days. Alexa’s
AGI from all sources other than the rental property is $200,000.
Unless otherwise specified, Alexa has no sources of passive income.
Assume there are 365 days in the year.
Assume that in addition to renting the condo for 134 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $49,750 of gross rental receipts. Answer the following questions: (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days. (Amounts to be deducted should be indicated with a minus sign.)
Solutions
Expert Solution
| Note1- | ||||
| 134 rental Days + 8 days personal days = 142 days | ||||
| Allocation Factor= | No. of rental days/total no. of used days*100 | |||
| Gross rental income | 49,750 | |||
| Expenses: | ||||
| Insurance | - 3,350 | 94% | - 3,161 | |
| Mortgage interest | - 6,650 | 94% | - 6,275 | |
| Property taxes | - 2,800 | 94% | - 2,642 | |
| Repairs & maintenance | - 860 | 94% | - 812 | |
| Utilities | - 2,600 | 94% | - 2,454 | |
| Depreciation | - 23,800 | 94% | - 22,459 | |
| Less: total expenses | - 37,803 | |||
| Balance- net rental income | 11,947 | |||
ekkarill92 answered 5 days agoRelated Solutions
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