Problem 8-34 (LO 8-1, 8-2) Kelvin owns and lives in a duplex. He rents the other

Question

Problem 8-34 (LO 8-1, 8-2) Kelvin owns and lives in a duplex. He rents the other unit for $760 per month. He incurs the following expenses during the current year for the entire property Mortgage interest Property taxes Utilities Fixed light fixture in rental unit Fixed dishwasher in personal unit Painted entire exterior Insurance Depreciation (entire structure) $7,550 2,040 1,600 100 260 1,100 2,000 6,500 How are the above income and expenses reported on Kelvin's tax return? Personal Schedule A Schedule E 9,120 Income Mortgage interest Property taxes Utilities Fix light (rental) Fix dishwasher Paint exterior Insurance Depreciation $ 9,120

Explanation / Answer

Personal Schedule A Schedule E Income ($760 x 12) $9,120 Mortgage interest $7,550 $3,775 $3,775 -$3,775 Property taxes $2,040 $1,020 $1,020 -$1,020 Utilities $1,600 $800 N/A -$800 Fixed light fixture in rental unit $100 N/A N/A -$100 Fixed dishwasher in personal unit $260 $260 N/A N/A Painted entire exterior $1,100 $550 N/A -$550 Insurance $2,000 $1,000 N/A -$1,000 Depreciation ( entire structure) $6,500 $3,250 N/A -$3,250 Total $4,795 -$1,375

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