a. For AGI (rental) deductions b. Itemized deductions c. Basis at the end of the year d. For AGI deductions e. For AGI deductions
a. For AGI (rental) deductions b. Itemized deductions c. Basis at the end of the year d. For AGI deductions e. For AGI deductions
Chapter12: Alternative Minimum Tax
Section: Chapter Questions
Problem 41P
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Transcribed Image Text:Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following
expenses in connection with her condo:
Insurance
Advertising expense
Mortgage interest
Property taxes
Repairs & maintenance
Utilities
Depreciation
$ 1,020
510
3,570
909
660
960
8,700
During the year, Tamar rented out the condo for 75 days, receiving $10,000 of gross income. She
personally used the condo for 35 days during her vacation. Tamar's itemized deduction for nonrental
taxes is less than $10,000 by more than the property taxes allocated to the rental use of the
property.
Assume Tamar uses the IRS method of allocating expenses to rental use of the property.
Transcribed Image Text:Required:
a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to the condo?
b. What is the total amount of itemized deductions Tamar may deduct in the current year related to the condo?
c. If Tamar's basis in the condo at the beginning of the year was $150,000, what is her basis in the condo at the end
of the year?
d. Assume that gross rental revenue was $2,000 (rather than $10,000). What amount of for AGI deductions may
Tamar deduct in the current year related to the condo (assuming she itemizes deductions before considering
deductions associated with the condo)?
e. Assuming that gross rental revenue was $2,000 (rather than $10,000) and that Tamar's itemized deduction for
taxes is $10,000 before considering property taxes allocated to rental use of the property, what amount of for AGI
deductions may Tamar deduct in the current year related to the condo?
Note: For all requirements, do not round apportionment ratio. Round all other dollar values to the nearest whole
dollar amount.
a. For AGI (rental) deductions
b. Itemized deductions
c. Basis at the end of the year
d. For AGI deductions
e. For AGI deductions
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