Natalie owns a condominium near Cocoa Beach in Florida

Natalie owns a condominium near Cocoa Beach in Florida

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

Insurance $1,000

Advertising expense 500

Mortgage interest 3,500

Property taxes 900

Repairs & maintenance 650

Utilities 950

Depreciation 8,500

During the year, Natalie rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the condo for 35 days during her vacation.

Assume Natalie uses the IRS method of allocating expenses to rental use of the property.

a) What is the total amount of for AGI (rental) deductions Natalie may deduct in the current year related to the condo?

b) What is the total amount of itemized deductions Natalie may deduct in the current year related to the condo?

c) If Natalie’s basis in the condo at the beginning of the year was $150,000, what is her basis in the condo at the end of the year?

d) Assume that gross rental revenue was $2,000 (rather than $10,000). What amount of for AGI deductions may Natalie deduct in the current year related to the condo?

e) Using the original facts, complete Natalie’s Form 1040, Schedule E, for this property. Also, partially complete Natalie’s 1040, Schedule A, to include her from AGI deductions related to the condo.