Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 4, Problem 9P
To determine
Introduction: The net rental income is taxable, generally, rental income is reported with related expenses on Part I of Schedule E. Any service provided to tenants such as cleaning or maid services are subjected to self-employment tax and reported in Schedule C.
The net rental income for the year assuming the house is rented for full 12 months.
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Dillon rented out his home for 9 days during the year for $6,400. He resided in the home for the remainder of the year. Expenses
associated with use of the home for the entire year were as follows:
$ 3,150
Real property taxes
Mortgage interest
12,375
Repairs
1,375
Insurance
1,570
Utilities
5,280
Depreciation
12,800
Dillon's AGI is $134,436 before considering the effect of the rental activity. His AGI after considering the tax effect of the rental use of
his home is $
Vk
In the current year, Sandra rented her vacation home for 75 days, used it for personal use for 22 days, and left it vacant for the remainder of the year. Her income and expenses before allocation are as follows:
Rental income
11,400
Real estate taxes
1,200
Utilities
1,350
Mortgage interest
3,200
Depreciation
6,000
Repairs and maintenance
810
equired:
What is Sandra’s net income or loss from the rental of her vacation home? Use the Tax Court method.
Note: Round your intermediate computations to 5 decimal places and final answers to nearest whole dollar value.
Chapter 4 Solutions
Income Tax Fundamentals 2020
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