Alicia and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (six weeks) at $890 per weekand used it for personal use for 58 days. The total costs of maintaining the home are as follows:Hortgage interestProperty taxesInsuranceutilitiesRepairsDepreciationRequired:a. What is the proper tax treatment of this information on their tax return using the Tax Court method?Note: Use 365 days in a year. Round your intermediate computations to 5 decimal places and final answers to nearest wholedollar value.IncomeMortgage interestProperty taxesInsuranceUitsRepairsShow Transcribed TextRepairsDepreciationNet income$Tex court methodIRS methodSchedule E$4,2007001,2003,2001,9005,500Direct allocation method iAppropriation methodOral matheSchedule Ab. Are there options available for how to allocate the expenses between personal and rental use?Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correctanswer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a questionmerk will be automatically graded as incorrect.3cChe mark will be automatically graded as incorrect.Tax court methodIRS methodDirect allocation methodAppropriation methodOnly rental methodc. What is the proper tax treatment of the rental income and expenses if Alicia and Marie rented the house for only 14 days?Chec

The Tax Court method, used for rental property with mixed personal and rental use, allocates…

Answered: Required: a. What is the proper tax…

Required: a. What is the proper tax treatment of this information on their tax return using the Tax Court method? year Round Note: Lise 365 erme omputations to 5 decimal places and final

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Alicia and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (six weeks) at $890 per week
and used it for personal use for 58 days. The total costs of maintaining the home are as follows:
Hortgage interest
Property taxes
Insurance
utilities
Repairs
Depreciation
Required:
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.
Income
Mortgage interest
Property taxes
Insurance
Uits
Repairs
Show Transcribed Text
Repairs
Depreciation
Net income
$
Tex court method
IRS method
Schedule E
$4,200
700
1,200
3,200
1,900
5,500
Direct allocation method i
Appropriation method
Oral mathe
Schedule A
b. Are there options available for how to allocate the expenses between personal and rental use?
Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct
answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question
merk will be automatically graded as incorrect.
3
c
Che

mark will be automatically graded as incorrect.
Tax court method
IRS method
Direct allocation method
Appropriation method
Only rental method
c. What is the proper tax treatment of the rental income and expenses if Alicia and Marie rented the house for only 14 days?
Chec

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Can you help me with this practice problem C.