Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she Incurs the following expenses in connection with her condo: Insurance Advertising expense Hortgage interest Property taxes Repairs & maintenance Utilities Depreciation $ 1,460 730 5,110 1,107 888 1,180 13,100 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.
Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she Incurs the following expenses in connection with her condo: Insurance Advertising expense Hortgage interest Property taxes Repairs & maintenance Utilities Depreciation $ 1,460 730 5,110 1,107 888 1,180 13,100 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: accounting
![Required information
[The following information applies to the questions displayed below.]
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.
Utilities
Depreciation
$ 1,460
730
5,110
1,107
880
1,180.
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
a For AGI (rental) deductions
b. Itemized deductions
13,100
Assume Tamar uses the IRS method of allocating expenses to rental use of the property.
a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to 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 (assuming she itemizes deductions before considering deductions associated with the condo)?
e. Assuming that gross rental revenue was $2,000 (rather than $10,000) and that Tamar's itemized deduction for taxes is $10,000
before considering property taxes allocated to rental use of the property, what amount of for AGI deductions may Tamar deduct in
the current year related to the condo?
Note: For all requirements, do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount.
c. Basis at the end of the year
d. For AGI deductions
e. For AGI deductions
8
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Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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.
Utilities
Depreciation
$ 1,460
730
5,110
1,107
880
1,180.
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
a For AGI (rental) deductions
b. Itemized deductions
13,100
Assume Tamar uses the IRS method of allocating expenses to rental use of the property.
a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to 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 (assuming she itemizes deductions before considering deductions associated with the condo)?
e. Assuming that gross rental revenue was $2,000 (rather than $10,000) and that Tamar's itemized deduction for taxes is $10,000
before considering property taxes allocated to rental use of the property, what amount of for AGI deductions may Tamar deduct in
the current year related to the condo?
Note: For all requirements, do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount.
c. Basis at the end of the year
d. For AGI deductions
e. For AGI deductions
8
***
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Step 1: IRS method of allocating expenses:
VIEWStep 2: (a) Determine the total amount of for AGI (rental) deductions T may deduct in the current year:
VIEWStep 3: (b) Determine the total amount of itemized deductions T may deduct in the current year:
VIEWStep 4: (c) Determine T’s basis assuming the basis at the beginning of the year was $150,000:
VIEWStep 5: (d) Determine AGI deductions that may T will deduct in the current year related to the C:
VIEWStep 6: (e) Determine AGI deductions that may T will deduct in the current year related to the C:
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