Alicia and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (six weeks) at $975 per week and used it for personal use for 58 days. The total costs of maintaining the home are as follows: Mortgage interest Property taxes Insurance Utilities Repairs Depreciation Required: $ 4,540 870 1,455 3,455 1,985 5,840 a. What is the proper tax treatment of this information on their tax return using the Tax Court method? Note: Use 365 days in a year. Round your intermediate computations to 5 decimal places and final answers to nearest whole dollar value. Schedule E Income Mortgage interest $ 5,850 Schedule A 0 $ Property taxes Insurance Utilities EA 365 65 $ 4,540 870 + $ 611 $ 1,450 Repairs $ 835 0 Depreciation $ SA 2,457 0 Net income $ (1,776)

CONCEPTS IN FED.TAX.,2020-W/ACCESS
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ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 54P
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Alicia and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (six weeks) at $975 per week
and used it for personal use for 58 days. The total costs of maintaining the home are as follows:
Mortgage interest
Property taxes
Insurance
Utilities
Repairs
Depreciation
Required:
$ 4,540
870
1,455
3,455
1,985
5,840
a. What is the proper tax treatment of this information on their tax return using the Tax Court method?
Note: Use 365 days in a year. Round your intermediate computations to 5 decimal places and final answers to nearest whole
dollar value.
Schedule E
Income
Mortgage interest
$
5,850
Schedule A
0
$
Property taxes
Insurance
Utilities
EA
365
65
$
4,540
870
+
$
611
$
1,450
Repairs
$
835
0
Depreciation
$
SA
2,457
0
Net income
$
(1,776)
Transcribed Image Text:Alicia and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (six weeks) at $975 per week and used it for personal use for 58 days. The total costs of maintaining the home are as follows: Mortgage interest Property taxes Insurance Utilities Repairs Depreciation Required: $ 4,540 870 1,455 3,455 1,985 5,840 a. What is the proper tax treatment of this information on their tax return using the Tax Court method? Note: Use 365 days in a year. Round your intermediate computations to 5 decimal places and final answers to nearest whole dollar value. Schedule E Income Mortgage interest $ 5,850 Schedule A 0 $ Property taxes Insurance Utilities EA 365 65 $ 4,540 870 + $ 611 $ 1,450 Repairs $ 835 0 Depreciation $ SA 2,457 0 Net income $ (1,776)
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