Shanna, a calendar year and cash basis taxpayer, rents property from Janice. As

Question

Shanna, a calendar year and cash basis taxpayer, rents property from Janice. As part of the rental agreement, Shanna pays $15,800 rent on April 1, 2018 for the 12 months ending March 31, 2019.

If required, round any division to two decimal places. Round your final answer to the nearest dollar.

a. Shanna's deduction for rent expense in 2018 is $_______

b. Assume the same facts, except that the $15,800 is for 24 months' rent ending March 31, 2020. Shanna's deduction for rent expense in 2018 is $_______

Explanation / Answer

In the above case Shanna pays rent $15,800 on April 1, 2018 for the 12 months ending March 31, 2019. As per the federal deductions a tenant cannot claim or deduct their rental payments from the federal income tax. Further, it is provided so if their is an lease agreement, and it is required to make the property tax payments In that case a tenant can claim that portion of property tax that he pays directly as a property tax.

Therefore, it doesn't matter how much she pays and for what time period. She cannot claim any deduction from the income tax.

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