Darius and Chantal own a cabin in Lake Arrowhead, California. During the year, t

Question

Darius and Chantal own a cabin in Lake Arrowhead, California. During the year, they rented it for 45 days for $10,000 and used it for 12 days for personal use. The house remained vacant for the remainder of the year. The expenses for the house included $9,000 in mortgage interest, $2,000 in property taxes, $1,000 in utilities, $600 in maintenance, and $3,000 in depreciation. What is their net income or loss from their cabin (without considering the passive loss limitation)? Use the IRS method for allocation of expenses. (Round your answer to the nearest whole dollar)

Explanation / Answer

Rent                                                                  $10,000

Less: expenses

Mortage interest         $9,000

Property tax                  2,000

Utilties                          1,000

Maintenance                   600

Depreciation                 3,000

total                              $15,600*45/57 $(12,316)

Loss                                                     ( $2316)

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.