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Sheena Maskell Sheena Maskell
wrote...
Posts: 1902
7 years ago
Mackensie owns a condominium in the Rocky Mountains. During the year, Mackensie uses the condo a total of 23 days. The condo is also rented to tourists for a total of 77 days and generates rental income of $10,900. Mackensie incurs the following expenses in the condo:
Expense   Amount
Mortgage interest   $ 5,000
Property taxes   3,500
Utilities   2,500
Insurance   1,800
Depreciation   11,000

Using the court's method of allocating expenses, the amount of depreciation that Mackensie may take with respect to the rental property will be
A) $0.
B) $1,044.
C) $5,797.
D) $11,000
Textbook 
Prentice Hall's Federal Taxation: 2011: Individuals

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
Authors:
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Replies
wrote...
7 years ago
C
My explanation --
Rental income   $10,900
Minus:   Mortgage interest (77/365 × $5,000)   ( 1,054)
   Property taxes (77/365 × $3,500)   ( 738)
   Utilities (77/100 × $2,500)   (1,925)
   Insurance (77/100 × $1,800)   ( 1,386)
   Depreciation (Remaining income)   ( 5,797)
Taxable rental income   $    -0-
Sheena M. Author
wrote...
7 years ago
Perfect Person Raising Both Hands in Celebration
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