Randolph and Tammy own a second home. They spent 45 days there and rented it for 88 days at $150 per day during the year. The total costs relating to the home include the following:
Mortgage interest…...……. $4,500
Property taxes …….………. 1,200
Insurance………….………. 1,800
Utilities…………….……… 2,300
Repairs……………………. 1,500
Depreciation……...……….. 6,500
What is the proper treatment of these items relating to the second home? Would you use the Tax Court allocation or the IRS allocation? Explain.