Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo: Insurance Advertising expense $ 840 Mortgage interest Property taxes Repairs & maintenance 585 5,100 1,410 900 Utilities Depreciation 1,040 11,500 During the year, Tamar rented out the condo for 75 days, receiving $29,500 of gross income. She personally used the condo for 39 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 $215,000, what is her basis in the condo at the end of the year? d. Assume that gross rental revenue was $2,900 (rather than $29,500). 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
Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo: Insurance Advertising expense $ 840 Mortgage interest Property taxes Repairs & maintenance 585 5,100 1,410 900 Utilities Depreciation 1,040 11,500 During the year, Tamar rented out the condo for 75 days, receiving $29,500 of gross income. She personally used the condo for 39 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 $215,000, what is her basis in the condo at the end of the year? d. Assume that gross rental revenue was $2,900 (rather than $29,500). 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Uramilaben
Transcribed Image Text:Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection
with her condo:
Insurance
Advertising expense
Mortgage interest
Property taxes
Repairs & maintenance
$ 840
585
5,100
1,410
900
Utilities
Depreciation
1,040
11,500
During the year, Tamar rented out the condo for 75 days, receiving $29,500 of gross income. She personally used the
condo for 39 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 $215,000, what is her basis in the condo at the end of
the year?
d. Assume that gross rental revenue was $2,900 (rather than $29,500). 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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Step 1: Define Adjusted Gross Income:
VIEWStep 2: a. Determine the total amount of AGI:
VIEWStep 3: b. Compute the total amount of itemized deduction in the current year:
VIEWStep 4: c. Calculate the adjusted basis of Condo at the end of the year:
VIEWStep 5: d. Determine the amount of AGI deduction:
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