Nancy Kapiolani lives in a duplex that she owns at 1218 Park Ave S., Tacoma, WA 98447. Nancy rents one-half of her duplex and lives in the other half. In 2023, her existing tenant’s lease expires and the tenant moves out. The tenant paid $2,500 in rent during 2023. Nancy had collected first and last months’ rent from the tenant in 2022. Due to the condition of the unit, Nancy keeps $200 of the security deposit to make repairs. Her new tenant moves in and pays $1,000 per month for a one-year lease starting July 1, 2023. The new tenant is also required to pay Nancy first and last months’ rent plus a $500 security deposit. The unit is rented for 365 days during 2023. Nancy’s basis for depreciation on the rental portion is $120,000, and she uses straight-line depreciation with a 27.5 year useful life. Repairs to the rental half of the unit are $400 (including the $200 from the security deposit). On the whole duplex, real estate taxes are $2,200, interest on the mortgage is $3,400, utilities are $1,800, and insurance is $450. Use Part I of Schedule E to report Nancy's income from rental of part of the duplex.
Nancy Kapiolani lives in a duplex that she owns at 1218 Park Ave S., Tacoma, WA 98447. Nancy rents one-half of her duplex and lives in the other half. In 2023, her existing tenant’s lease expires and the tenant moves out. The tenant paid $2,500 in rent during 2023. Nancy had collected first and last months’ rent from the tenant in 2022. Due to the condition of the unit, Nancy keeps $200 of the security deposit to make repairs. Her new tenant moves in and pays $1,000 per month for a one-year lease starting July 1, 2023. The new tenant is also required to pay Nancy first and last months’ rent plus a $500 security deposit. The unit is rented for 365 days during 2023. Nancy’s basis for depreciation on the rental portion is $120,000, and she uses straight-line depreciation with a 27.5 year useful life. Repairs to the rental half of the unit are $400 (including the $200 from the security deposit). On the whole duplex, real estate taxes are $2,200, interest on the mortgage is $3,400, utilities are $1,800, and insurance is $450. Use Part I of Schedule E to report Nancy's income from rental of part of the duplex.
Chapter3: Income Sources
Section: Chapter Questions
Problem 82P: Lorene, Inc., owns an apartment complex. The terms of Lorenes lease agreement require new tenants to...
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Nancy Kapiolani lives in a duplex that she owns at 1218 Park Ave S., Tacoma, WA 98447. Nancy rents one-half of her duplex and lives in the other half. In 2023, her existing tenant’s lease expires and the tenant moves out. The tenant paid $2,500 in rent during 2023. Nancy had collected first and last months’ rent from the tenant in 2022. Due to the condition of the unit, Nancy keeps $200 of the security deposit to make repairs. Her new tenant moves in and pays $1,000 per month for a one-year lease starting July 1, 2023. The new tenant is also required to pay Nancy first and last months’ rent plus a $500 security deposit. The unit is rented for 365 days during 2023.
Nancy’s basis for depreciation on the rental portion is $120,000, and she uses straight-line depreciation with a 27.5 year useful life. Repairs to the rental half of the unit are $400 (including the $200 from the security deposit). On the whole duplex, real estate taxes are $2,200, interest on the mortgage is $3,400, utilities are $1,800, and insurance is $450.
Use Part I of Schedule E to report Nancy's income from rental of part of the duplex.
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