FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo:
$ 1,480
575
4,850
1,230
580
650
9,500
Insurance
Advertising expense
Mortgage interest
Property taxes
Repairs & maintenance
Utilities
Depreciation
During the year, Tamar rented out the condo for 86 days, receiving $24,750 of gross income. She personally used the condo for 47
days during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxes
allocated to the rental use of the property.
Assume Tamar uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the current year.
Note: Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount.
Required:
a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to the condo (assuming she
itemizes deductions before considering deductions associated with the condo)?
b. What is the total amount of itemized deductions Tamar may deduct in the current year related to the condo?
c. If Tamar's basis in the condo at the beginning of the year was $162,000, what is her basis in the condo at the end of the year?
d. Assume that gross rental revenue was $2,950 (rather than $24,750). What amount of for AGI deductions may Tamar deduct in the
current year related to the condo?
a. For AGI (rental) deductions
b. Itemized deductions
c. Basis in the condo at the end of the year
d. For AGI deductions
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Transcribed Image Text:Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo: $ 1,480 575 4,850 1,230 580 650 9,500 Insurance Advertising expense Mortgage interest Property taxes Repairs & maintenance Utilities Depreciation During the year, Tamar rented out the condo for 86 days, receiving $24,750 of gross income. She personally used the condo for 47 days during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxes allocated to the rental use of the property. Assume Tamar uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the current year. Note: Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount. Required: a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to the condo (assuming she itemizes deductions before considering deductions associated with the condo)? b. What is the total amount of itemized deductions Tamar may deduct in the current year related to the condo? c. If Tamar's basis in the condo at the beginning of the year was $162,000, what is her basis in the condo at the end of the year? d. Assume that gross rental revenue was $2,950 (rather than $24,750). What amount of for AGI deductions may Tamar deduct in the current year related to the condo? a. For AGI (rental) deductions b. Itemized deductions c. Basis in the condo at the end of the year d. For AGI deductions
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