7. As Lucy's sole heir, Matthew inherited her home and its furnishings (located at 1420 Chickadee...

Transcribed Image Text:

7. As Lucy's sole heir, Matthew inherited her home and its furnishings (located at 1420 Chickadee Lane, Topeka, KS 66546). The costs and values involved are as follows: Cost Basis FMV on 2/3/13 Lot $ 10,000 $ 30,000 House 110,000 250,000 Furnishings 55,000 25,000 Because the real estate market was depressed and the home was located in an attractive rental area, Matthew decided not to sell. Instead, he rented the property fully furnished on May 1, 2013. The terms of the lease (executed on April 30) provide for the following: one-year lease at $2,500 per month (payable on the first of each month), last month's rent payable in advance, and damage deposit of $3,000. In total, Matthew received $25,500 from the tenants in 2013 for their use of the property. Besides depreciation, his expenses were as follows: Property taxes $4,800 Insurance 3,900 Repairs 2,100 Real estate renter's location service 400 Matthew plans to use MACRS straight-line depreciation (mid-month convention) for the realty. Regarding the personalty, see Exhibit 8.1 in Chapter 8 of the text. 7. As Lucy's sole heir, Matthew inherited her home and its furnishings (located at 1420 Chickadee Lane, Topeka, KS 66546). The costs and values involved are as follows: Cost Basis FMV on 2/3/13 Lot $ 10,000 $ 30,000 House 110,000 250,000 Furnishings 55,000 25,000 Because the real estate market was depressed and the home was located in an attractive rental area, Matthew decided not to sell. Instead, he rented the property fully furnished on May 1, 2013. The terms of the lease (executed on April 30) provide for the following: one-year lease at $2,500 per month (payable on the first of each month), last month's rent payable in advance, and damage deposit of $3,000. In total, Matthew received $25,500 from the tenants in 2013 for their use of the property. Besides depreciation, his expenses were as follows: Property taxes $4,800 Insurance 3,900 Repairs 2,100 Real estate renter's location service 400 Matthew plans to use MACRS straight-line depreciation (mid-month convention) for the realty. Regarding the personalty, see Exhibit 8.1 in Chapter 8 of the text.

Answer rating: 100% (QA)

f1040sc2016pdf Adobe Acrobat Pro DC File Edit View Window Help Home Tools 1 10 Ju f10402016pdf f1040... View the full answer