Required a Required b Required c What is the tax treatment of these items relating to second home under Tax Court allocation method? Note: Round your intermediate computations to 5 decimal places and final answers to nearest whole dollar value. Tax Court Method -Schedule E Personal Income Mortgage interest Property taxes Insurance Utilities Repairs Depreciation Net rental income $ (4,500) Randolph and Tammy own a second home. They spent 45 days there and rented it for 88 days at $150 per day during the year. The total costs relating to the home include the following: Mortgage interest Property taxes Insurance Utilities Repairs Depreciation Required: $ 4,500 1,200 1,800 2,300 1,500 6,500 a. What is the tax treatment of these items relating to second home under Tax Court allocation method? b. What is the tax treatment of these items relating to second home under IRS allocation method? c. Which of the methods is preferred?
Required a Required b Required c What is the tax treatment of these items relating to second home under Tax Court allocation method? Note: Round your intermediate computations to 5 decimal places and final answers to nearest whole dollar value. Tax Court Method -Schedule E Personal Income Mortgage interest Property taxes Insurance Utilities Repairs Depreciation Net rental income $ (4,500) Randolph and Tammy own a second home. They spent 45 days there and rented it for 88 days at $150 per day during the year. The total costs relating to the home include the following: Mortgage interest Property taxes Insurance Utilities Repairs Depreciation Required: $ 4,500 1,200 1,800 2,300 1,500 6,500 a. What is the tax treatment of these items relating to second home under Tax Court allocation method? b. What is the tax treatment of these items relating to second home under IRS allocation method? c. Which of the methods is preferred?
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 54P
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Transcribed Image Text:Required a
Required b
Required c
What is the tax treatment of these items relating to second home under Tax Court allocation method?
Note: Round your intermediate computations to 5 decimal places and final answers to nearest whole dollar value.
Tax Court
Method
-Schedule E
Personal
Income
Mortgage interest
Property taxes
Insurance
Utilities
Repairs
Depreciation
Net rental income
$
(4,500)
Transcribed Image Text:Randolph and Tammy own a second home. They spent 45 days there and rented it for 88 days at $150 per day during the year. The
total costs relating to the home include the following:
Mortgage interest
Property taxes
Insurance
Utilities
Repairs
Depreciation
Required:
$ 4,500
1,200
1,800
2,300
1,500
6,500
a. What is the tax treatment of these items relating to second home under Tax Court allocation method?
b. What is the tax treatment of these items relating to second home under IRS allocation method?
c. Which of the methods is preferred?
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