Question

Robyn rents her beach house for 60 days and uses it for personal use for 30 days during the year. The rental income is $11,000 and the expenses are as follows:

Mortgage interest $9,000

Real estate taxes: 3,000

Utiites: 2,000

Maintenance: 1,000

Insurance: 500

Depreciation (rental part only): 9,000

Using the Court's appraoch, determine the effect of this rental on Robyn's gross income. Indicate which deductions (if any) are for AGI and which (if any) are from AGI and how much goes to each category.

Answer 1

Royan Rental Income

Rental Income from own Beach House $ 11,000

Less:

Mortgage interest $9,000

Real estate taxes: 3,000

Utiites        2,000

Insurance: 500 14,500 *8 /12 $ 9,667

Depreciation 9000 $6,000    $ 15,667

Adjusted Gross Income $ -4,667

** Costs Royan incur to place the property in service, manage it and maintain it generally are deductible. Even if your rental property is temporarily vacant, the expenses are still deductible while the property is vacant and held out for rent.

Deductible expenses include, but are not limited to extravagant. Royan Carry on Rental Business 8 Months

but 4 Months are Vacant.  Maintenance Exp are not Deduct.