Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the

Question

Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:


Insurance $3,350
Mortgage interest 6,650
Property taxes 2,800
Repairs & maintenance 860
Utilities 2,600
Depreciation 23,800

During the year, Alexa rented out the condo for 134 days. She did not use the condo at all for personal purposes during the year. Alexa’s AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income.

Assume that in addition to renting the condo for 134 days, Alexa uses the condo for eight days of personal use. Also assume that Alexa receives $49,750 of gross rental receipts. Answer the following questions:


a.
What is the total amount of from AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount. Omit the "$" sign in your response.)

Explanation / Answer

All of the expenses could be deducted from the rental gross receipt of $49,750. In this particular scenario, the personal days (8) is disregarded as it is less than 10% of the total rented out days. If it was more than, then some of the expenses would be allocated between personal and rental. On Sch E of the 1040, all of these expenses are deductions from the rental income.

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