Stephanie owns a rental property as a 100% interest-holder. Her daughter, Liz, manages all aspects of...

Stephanie owns a rental property as a 100% interest-holder. Her daughter, Liz, manages all aspects of the rental and collects rent. Stephanie lets Liz keep half of the rental income for her work. Also, Stephanie intends to give the rental property to Liz sometime soon. How much of the rental income will each taxpayer report on Schedule E, Supplemental Income and Loss? Stephanie will report 100% of the rental income and Liz will report no rental income. Liz will report 100% of the rental income and Stephanie will report no rental income. Stephanie will report 50% of the rental income and Liz will report 50% of the rental income. Stephanie and Liz can decide how much rental income each wants to report...

Expert Solution

Stephanie will report 100% rental income with below available deduction.

From the rental income, a property owner is allowed to deduct municipal taxes on the property, rent that is not realised, a 30% standard deduction on the annual value of the property, as well as interest on the money borrowed for the renovation of the property

ekkarill92 answered 2 years ago

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