Mark for folow up Question 47 of 75 What is the Tax Court method of allocating r

Question

Mark for folow up Question 47 of 75 What is the Tax Court method of allocating rental property expenses? O All expenses allocated as a percentage of rental-use days to total days owned O All expenses allocated as a peroentage of rental-use days to days used for all purposes. Mortgage interest, quaifed mortgage insurance premiums, real estate taxes, and casuaity losses añlocated as a percentage of rental-use days to total days owned during the year O Mortgage interest and real estate taxes allocated as percentage of rental-use days to total days used

Explanation / Answer

Under tax court method Interest and taxes on the rental property should be allocated based on the ratio of number of rental days to the total number of days in the year (365).

The remaining expenses should be allocated using the IRS method.

Expenses like management fees are fully deductible as they are 100% associated to the rental.

Answer is Morgage interest and real estate taxes are allocated as percentage of Rental use days to Total days used.

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