Net Rental Income. (Obj. 1) Sandee, a cash basis taxpayer, owns a house with two

Question

Net Rental Income. (Obj. 1) Sandee, a cash basis taxpayer, owns a house with two identical units. Sandee resides in one unit and rents out the other. The tenant made timely monthl 4. rental payments of $500 for the months of January through November 2016. The tenant paid rents for December 2016 and January 2017 on January 5, 2017. During the year, Sandee paid $3,600 for utilities and $600 for insurance. These expenses were for the entire house She paid $400 for maintenance and repairs on the rental unit. Depreciation on the entire house equals $3,000. Compute Sandee's 2016 net rental income. Vacation Homes. (Obj. 2) Dari owns a vacation home that she personally uses 14 days during the year. The rest of the year the following occupants used the home. Fair rental price is $125 a night. 5. Number of Days Occupant Dari's best friend, who paid no rent Dari's brother, who paid a fair rental price Couple who won a charity auction Unrelated persons, who paid rent of $7,500 21 7 60

Explanation / Answer

Answer:

Calculation of Net rental Income:

Rent Received during the period : $500 x 11 = $5500

Less: Expenses for the rented unit : ($1925)

(3600+600)/2 * 11/12

Less: Expenses exclusively for rented unit: ($400)

Less: Depreciation: 3000/2*11/12: ($1375)

Net Rental Income = $1800 Answer

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