O ($8,000). 18. Abby owns a condominium in the Great Smokey Mountains. During th
ID: 2508268 • Letter: O
Question
O ($8,000). 18. Abby owns a condominium in the Great Smokey Mountains. During the year, Abby uses the condo a total of 21 days. The condo is also rented to tourists for a total of 79 days and generates rental income of $12,500. Abby incurs the following expenses: Expense Amount Mortgage interestv 4,100 1,90 2,20 1,20 10,00 Property taxes Utilities Insurance Depreciation Using the IRS method of allocating expenses, the amount of depreciation that Abby may take with respect to the rental property will be A) S 5,074. B) S 8,515 C) $ 7,900 D) $10,000. 19. Vanessa, a calendar-year taxpayer, owns 100 shares of RG Corporation stock, which was purchased two years ago for $10,000. Vanessa sells all 100 shares on December 15, of the current year, for $6,000 and on January 5, of the following year, purchases 75 shares of RG Corporation stock. Vanessa's recognized loss will be A) SO B) $400. C) S600. 1 D) $1,000 Lucille borrows S250,000 to finance taxable and tax-exempt investments. She incurs $12,000 llagntad aqually hetween the taxable and tax-exempt investments.Explanation / Answer
Answer to Q 18 will be Option A i.e. $ 5074
Q 19
Preferred stock is not considered substantially identical to common stock of the same corporation and wash sale rules will not apply. Therefore, the loss of $400 ($6000 - $10000)x25/100 is allowed. Option D
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