Question

Question 72 of 75. Mona owns a rental house that she has rented to various tenants since September of 2001. She converted the house from personal to rental property. At the time of conversion, the adjusted basis of the house was $154,000, including land value of $11,600. The fair market value of the house was $146,000, including land value of $11,600. The backyard fence fell into disrepair in June of 2018. She had it replaced June 27th, 2018, for $8.399. Her rental income was $12,240. Her expenses for the year include: • Yard maintenance of $480. • Insurance of $2,520. • Tax preparation fees of $500. • Mortgage interest of $3,572. • Repairs of $650. • Real estate taxes of $1,938. • Exterminator of $143. Mona is not a real estate professional, and she materially participates in the rental activity. If Mona elects to opt out of special depreciation for the new fence, what is her net profit or loss on the rental house? O (57.277) O ($5,962) O ($3,363) O ($2,870) Mark for follow up

Answer 1

Ans :- At time 0f convervion fair marlket adjusted basis of house of house :- $154,000 was valve $146,000. LOSS- $8000 154,000 - 146,000 She pots tor backyard fence:- $12,240 $8399 Her rental income To taL enpenses :- Mer $9803. ( Yard maintenune) 480 +2520 CInsurance) 500 ( Tax prepara tion) (Mortgage Interest) CRepairs) + 3572 6 50 t. + 1938 (Taxes). (EX terminator). Expense 1 43 Income Mona (Rental $9803 (expenser) - $ 12,240 income) $ 9803 $ 8999. bo@eso (Bachyard fence ) Ans 12,240 - $ 5962 9803 +8399 Total LOSs:-