Tina owns a condominium in Santa Barbara. During the current year, she incurs the following expenses related to the property:
Mortgage interest $10,000
Property taxes 1,800
Utilities 800
Maintenance fees 1,000
Repairs 600
Depreciation 6,000
a. For each of the following scenarios, indicate whether Tina would treat the condo for income tax purposes as personal use property, a rental, or a vacation home.
|
Case
|
Rental Income
|
Rental Days
|
Personal-use
Days
|
Is the classification:
Personal, Rental, or Vacation home?
|
|
A
|
$12,000
|
300
|
0
|
|
|
B
|
$9,000
|
40
|
10
|
|
|
C
|
$9,000
|
40
|
20
|
|
|
D
|
$2,000
|
12
|
48
|
|
|
E
|
$11,000
|
280
|
20
|
|
b. Consider Case B. What is the current deduction for adjusted gross income? If any expenses aren't deductible for AGI, explain why not and what happens to them.