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aimtobeacpa
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| Posted: 02 May 2011 at 02:26 | IP Logged
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pg 401 wiley
eg at bottom,Taxpaye rents his condominium for 120 days...
can someone explain how do we get itemized deuctions of 600 and 200...and y rest is just rental expense?
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thechamp26
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| Posted: 02 May 2011 at 22:25 | IP Logged
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Why don't you take the time to type the whole question so
people can try and help even if they don't have Wiley?
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jl0329
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| Posted: 03 May 2011 at 09:51 | IP Logged
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Even people do have Wiley, you should still type out the
question just out of courtesy.
If you feel like you are just too lazy to type it out, then
why should others go grab that book and turn all the way to
pg 401 to just answer your question?
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CPAFearful
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| Posted: 03 May 2011 at 13:21 | IP Logged
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aimtobeacpa wrote:
pg 401 wiley
eg at bottom,Taxpaye rents his condominium for 120 days...
can someone explain how do we get itemized deuctions of 600 and 200...and y rest is just rental expense?
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hi aimtobeacpa,
remember he used it for 60 days and rented it for 120 days. So he can take rental expense deductions for taxes, interest, and casualty loss and other expenses related to renting the condominium (limited to $2000 of rental income). Remember he used it for more than 14 and 10% of number of days rented. Utilities, maintenance, and depreciation are not itemized deductions, they get deducted after deductions otherwise allowable for interest, taxes, and casualty loss to the extent of rental income.
So out of the Mortgage interest of 1800, 1200 (120/180 * 1800) qualifies as direct rental expense. 180 is total days used as explained in the formula on page 401. Since mortgage interest can also be taken as an itemized deduction, the portion taken out because of personal use can be taken as a below the line deduction. This is also the same for real estate taxes (mentioned on pages 408-410). So for above the line deduction you want the portion of expenses attributable to property held for production of rents and royalties.
Hope this helps, goodluck.
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aimtobeacpa
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| Posted: 03 May 2011 at 16:00 | IP Logged
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sorry i did not get time to type the question..
@ CPAFearful Thanks...
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Topic: above line deduction
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