Tamar owns a condominium near Cocoa Beach in Florida. In 2023, she incurs the following expenses in connection with her condo:InsuranceAdvertising expenseMortgage interestProperty taxesRepairs & maintenance$ 1,0005003,500900650UtilitiesDepreciation9508,500During the year, Tamar rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the condo for 35days during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxesallocated 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 sheitemizes 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 $150,000, what is her basis in the condo at the end of the year?d. Assume that gross rental revenue was $2,000 (rather than $10,000). What amount of for AGI deductions may Tamar deduct in thecurrent year related to the condo?Answer is complete but not entirely correct.a. For AGI (rental) deductions$10,000b. Itemized deductions$1,400 xc. Basis in the condo at the end of the year$ 145,273d. For AGI deductionsS3,500

Tax accounting for rental properties refers to the set of rules and regulations related to the…

urance ertising expense tgage interest perty taxes airs & maintenance lities reciation $ 1,000 see 3,500 900 650 950 8,500 g the year, Tamar rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the ca during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property ated to the rental use of the property. me Tamar uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount. irod

urance ertising expense tgage interest perty taxes airs & maintenance lities reciation $ 1,000 see 3,500 900 650 950 8,500 g the year, Tamar rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the ca during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property ated to the rental use of the property. me Tamar uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount. irod

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 55P

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Question

Tamar owns a condominium near Cocoa Beach in Florida. In 2023, she incurs the following expenses in connection with her condo:
Insurance
Advertising expense
Mortgage interest
Property taxes
Repairs & maintenance
$ 1,000
500
3,500
900
650
Utilities
Depreciation
950
8,500
During the year, Tamar rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the condo for 35
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 $150,000, what is her basis in the condo at the end of the year?
d. Assume that gross rental revenue was $2,000 (rather than $10,000). What amount of for AGI deductions may Tamar deduct in the
current year related to the condo?
Answer is complete but not entirely correct.
a. For AGI (rental) deductions
$
10,000
b. Itemized deductions
$
1,400 x
c. Basis in the condo at the end of the year
$ 145,273
d. For AGI deductions
S
3,500

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