Question

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.)

Answer 1

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