Required: What effect do the expenses associated with the property have on her AGI? What effect do the expenses associated with the property have on her itemized deductions?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 46P
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Alexa owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following
expenses in connection with her condo:
Insurance
$ 2,000
Mortgage interest
Property taxes
Repairs & maintenance
Utilities
Depreciation
6,500
2,000
1,400
2,500
14,500
During the year, Alexa rented out the condo for 100 days. She did not use the condo at all for
personal purposes during the year. Alexa's AGI from all sources other than the rental property is
$200,000. Unless otherwise specified, Alexa has no sources of passive income.
Assume Alexa receives $30,000 in gross rental receipts.
Required:
What effect do the expenses associated with the property have on her AGI?
What effect do the expenses associated with the property have on her itemized deductions?
Transcribed Image Text:Alexa owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo: Insurance $ 2,000 Mortgage interest Property taxes Repairs & maintenance Utilities Depreciation 6,500 2,000 1,400 2,500 14,500 During the year, Alexa rented out the condo for 100 days. She did not use the condo at all for personal purposes during the year. Alexa's AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income. Assume Alexa receives $30,000 in gross rental receipts. Required: What effect do the expenses associated with the property have on her AGI? What effect do the expenses associated with the property have on her itemized deductions?
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