Aretha and Betina own a 10-unit apartment complex. Aretha owns a 60% inter- est in the apartment complex, and Betina has a 40% interest. Aretha is an investment banker and spends 120 hours helping to manage the apartment complex. Betina is the co-owner of a real estate agency where she works 1,600 hours a year. She also spends 520 hours managing the apartment complex. During the current year, the apartment complex generates a loss of $24,000. Aretha's adjusted gross income before considering the loss from the apartment complex is $175,000, and Betina's is $162,000. How much of the loss can Aretha deduct? How much of the loss can Betina deduct?
- Assume the same facts except that Aretha's adjusted gross income before the rental loss is $145,000 and Betina's is $140,000. How much of the loss can Aretha deduct? How much of the loss can Betina deduct?
- Assume the same facts as in part a, except that the apartment complex qualifies under federal guidelines as low-income housing. How much of the loss can Aretha deduct? How much of the loss can Betina deduct?