Question

Question 8 of 30. Helen purchased a rental house for $80,000 with land value of $15,000. Before making the house available for rent. Helen remodeled the bathroom. She installed a new vanity, fixtures, and flooring at a cost of $3.000. She also painted the existing walls and repaired the linen closet door at a cost of $550. How are these expenses reported? O $3,000 is capitalized and recovered through depreciation over 27 years, while $550 is deducted as a repair on Schedule E, line 14. $3,550 is added to the basis of the property, capitalized and recovered through depreciation over 27 years. $3,550 is reported as an investment interest deduction on Schedule A. O $3,550 is deducted as an expense on Schedule E, line 14

Answer 1

(a)3,000 is capitalised and recovered through depreciation over 271/2 hours, while 550 is deducted as a repair on the schedule E, line 14