During the current year, Kassandra incurs the following expenses with respect to
ID: 2551540 • Letter: D
Question
During the current year, Kassandra incurs the following expenses with respect to her beachfront condominium in Hawaii: (Click the icon to view the data.) In addition to the expenses listed above, Kassandra could have deducted a total of S8,400 depreciation if the property had been acquired only for investrment purposes. During the year, Kassandra uses the condominium 40 days for vacation. She also rents it out for a total of 60 days during the year, generating a total gross income of $9,600. Read the requirements Requirement a. What is the total amount of deductions for and from AGI that Kassandra may take during the current year with respect to the condominium using the IRS allocation method? (For purposes of this problem, use the allocation formula set forth by Sec. 280A. Enter "0 for zero amounts.) tem For AG From AGI More Info Insurance Repairs and maintenance Interest on mortgage Property taxes Utilities tem Amount Insurance Repairs and maintenance Interest on mortgage Property taxes Utilities S 620 740 2,600 2,200 2,200 Total deductions Requirement b. What is the effect on the basis of the condominium? The basis of the condominium is Done increased by S4,584. increased by $8.400. decreased by $4,584 decreased by $8,400. neither increased nor decreasedExplanation / Answer
Dollar Amount Item For AGI From AGI Insurance = $620 x 60/100 days $372.00 Repairs & Maintenance = $740 x 60/100 days $444.00 Interest on Mortgage = 2600 x 60/100 days $1,560.00 $1,040.00 Property Taxes = $2200 x 60/100 days $1,320.00 $880.00 Utilities = $2200 x 60/100 days $1,320.00 Depreciation = $8400 x 60/100 days = 5040 but limited to $4,500 for AGI deduction $4,500.00 Total Deductions $9,516.00 $1,920.00 b) Reduced by ($9600 - $5016) $4,584.00 Insurance = $620 x 60/100 days $372.00 Repairs & Maintenance = $740 x 60/100 days $444.00 Interest on Mortgage = 2600 x 60/100 days $1,560.00 Property Taxes = $2200 x 60/100 days $1,320.00 Utilities = $2200 x 60/100 days $1,320.00 Total $5,016.00
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.