Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the

Question

Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:

During the year, Alexa rented out the condo for 170 days. Alexa’s AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income.

Assume that in addition to renting the condo for 170 days, Alexa uses the condo for eight days of personal use. Also assume that Alexa receives $43,000 of gross rental receipts. Answer the following questions: (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

b. What is the total amount of from AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.

Insurance $ 3,800 Mortgage interest 11,200 Property taxes 3,800 Repairs & maintenance 950 Utilities 3,700 Depreciation 19,100

Explanation / Answer

Total amount of AGI deduction 40637.63 Gross Rental Income 43000 Less: Expense Insurance (3800 * 170 /178) 3629.21 Mortage Interest (11200 * 170 / 178) 10696.63 Property taxes (3800 * 170 / 178) 3629.21 Repairs & Maintenance (950 * 170 / 178) 907.30 Utilities (3700 * 170 / 178) 3533.71 Depreciation (19100 * 170 / 178) 18241.57 Total Expenses 40637.63 Net Rental Income 2362.37 (170 days + 8 days for personal use = 178 days)

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