Fred was the owner of a three-bedroom cabin in California. During 2013, he contracted with a property-management company to rent the cabin to third parties. In exchange for its services, Fred paid the company a 35 percent commission on all rental income received. The property-management company was responsible for maintaining the property, cleaning the cabin, paying all utilities, providing linens, and so on. The cabin was rented three times during the year for a total of 12 days and nine nights, with the average rental period being three days. Fred visited the cabin eight times during the year and stayed 19 nights and 27 days. Fred claimed $ 15,000 of Schedule E expenses relating to the rental of the cabin on his return under the active-rental-real-estate exception. Was Fred entitled to the deduction?
Answer to relevant QuestionsGina was falsely imprisoned as the result of an auto dealer’s criminal complaint against her. Although the charges were later dropped, she was arrested and detained for approximately eight hours. She was not hurt or abused ...After her employer transferred her to another town, Rosemary put her house up for sale. After two years of Internet listings, open houses, repairs, and price cuts, a buyer finally came along. By this time, the house had sat ...Chris Mac, a local CPA, is a self-employed tax return preparer. Chris works from home in a room that is exclusively used on a regular basis as the principal place of business. Last year, Chris built a new bathroom across the ...Higher-income taxpayers tend to engage in tax planning more than do lower-income taxpayers. Why? Assume that a taxpayer can choose when he is to receive $ 10,000 of fully taxable income. If the taxpayer receives the income at the end of Year 1, he will receive exactly $ 10,000. If he delays receipt of the income until ...
Post your question