During 2019, Kim incurs the following expenses with respect to her beachfront condominium in Hawaii. Expense...

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During 2019, Kim incurs the following expenses with respect to her beachfront condominium in Hawaii. Expense...

During 2019, Kim incurs the following expenses with respect to her beachfront condominium in Hawaii.

Expense Item Amount

Insurance $500

Repairs and maintenance 700

Interest on mortgage 3,000

Property taxes 1,000

Utilities 800

Depreciation 8,000

During 2019, Kim used the condominium 20 days for vacation. She rented it out for a total of 60 days, generating a total gross income of $9,100.

.Requirement a. What are the total amounts of deductions for and from AGI that Kim may take during 2019 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.)

Item	For AGI	From AGI
Insurance
Repairs and maintenance
Interest on mortgage
Property taxes
Utilities
Depreciation
Total deductions

business accounting

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Answer 1

Answer #1

Allocation of days	total	personal use. 84%	rental use 16%
Personal days	305	305	-
Rental days	60	-	60
	365
Financial data
Rental income	9100	-	9100
Mortgage interest	-3000	-2520	-480
Taxes	-1000	-840	-160
Repairs and maintenance	-700	-588	-115
Insurance	-500	-420	-80
Utilities	-800	-672	-128
Depreciation	-8000	-6720	-1280
Total	-4900	-11760	16860

Schedule rental income or loss

Gross rental income. 9100

Less category 1deduction

Minterest. -480

Taxes -160

Subtotal. 8460

Less category 2 deductions

Insurance. -80

Utilities. -128

Repairs and maintenance. -112

Subtotal. 8140

Less category 3 deductions

Depreciation. -1280

Rental income. 6860

Schedule itemized deductions

Mortgage interest. - 480

Taxes. -160

Total. -640

*Limited to remaining gross rental income since unit is treated as residence usage under 280A.

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Answer 2

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