Business, 25.02.2020 18:52 vipergod07

Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:

Insurance

$2,300

Mortgage interest

8,000

Property taxes

1,800

Repairs & maintenance

1,440

Utilities

4,600

Depreciation

16,300

During the year, Alexa rented out the condo for 158 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 that in addition to renting the condo for 158 days, Alexa uses the condo for eight days of personal use. Also assume that Alexa receives $34,500 of gross rental receipts. Answer the following questions:

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. (Do not round intermediate calculations.

Gross rental income

Expenses:

Insurance

Mortgage interest Property taxes

Repairs & maintenance

Utilities

Depreciation

Less: total expenses

Balance-net rental income

Total deductions

b.

What is the total amount of from 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. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

From AGI deduction

c.

Would Alexa be better or worse off after taxes in the current year if she uses the Tax Court method of allocating expenses?

Better off

Worse off

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Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses i...

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