Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Insurance $ 1,000 Advertising expense 500 Mortgage interest 3,500 Property taxes 900 Repairs & maintenance 650 Utilities 950 Depreciation 8,500 During the year, Natalie rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the condo for 35 days during her vacation. Assume Natalie uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the current year. (Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount.)

Using the original facts, complete Natalie's Form 1040, Schedule E, for this property. Also, partially complete Natalie's 1040, Schedule A, to include her from AGI deductions related to the condo.

Question

Ryker Watts

Business

3 January, 00:02

Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Insurance $ 1,000 Advertising expense 500 Mortgage interest 3,500 Property taxes 900 Repairs & maintenance 650 Utilities 950 Depreciation 8,500 During the year, Natalie rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the condo for 35 days during her vacation. Assume Natalie uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the current year. (Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount.)

Using the original facts, complete Natalie's Form 1040, Schedule E, for this property. Also, partially complete Natalie's 1040, Schedule A, to include her from AGI deductions related to the condo.

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Answers (1)

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Delilah Larsen · Answer 1

Answer and Explanation:

Natalie's Gross Income = $10,000

75 + 35 = 110 days

Expenses:

Insurance Expense (75/110) x 1000 682

Advertising Expense 500

Mortgage Interest (75/110) x 3500 2386

Property Taxes (75/110) x 900 614

Repairs and Maintenance (75/110) x 650 443

Utilities (75/110) x 950 648

Depreciation (75/110) x 8500 5795

Until the depreciation expenses the total expenses accumulate to 5273. If we deduct that with the gross income total we get 4727. We can only deduct 4727 from the total portion of 5795 depreciation expense.

Therefore, for AGI deductions we take total of (5273 + 4727) = $10,000

For Natalie's personal deduction of AGI

Mortgage interest (35/110) x 3500 1114

Property taxes (35/110) x 900 286

Total personal deduction for AGI $1400