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Business, 25.04.2020 03:14 BreadOfTheBear

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

Insurance $2,000
Mortgage interest 6,500
Property taxes 2,000
Repairs & maintenance 1,400
Utilities 2,500
Depreciation 14,500

During the year, Alexa rented out the condo for 100 days. She did not use the condo at all for personal purposes during the year. Alexa’s AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income.
Assuming Alexa receives $20,000 in gross rental receipts, answer the following questions:
a. What effect does the rental activity have on her AGI for the year?
b. Assuming that Alexa’s AGI from other sources is $90,000, what effect does the rental activity have on Alexa’s AGI? Alexa makes all decisions with respect to the property.
c. Assuming that Alexa’s AGI from other sources is $120,000, what effect does the rental activity have on Alexa’s AGI? Alexa makes all decisions with respect to the property.
d. Assume that Alexa’s AGI from other sources is $200,000. This consists of $141,750 salary, $12,200 of dividends, $28,300 of long-term capital gain, and net rental income from another rental property in the amount of $17,750. What effect does the Cocoa Beach condo rental activity have on Alexa’s AGI?

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Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses i...

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