Alexa owns a condominium near Cocoa Beach in Florida. This

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.

Assume that in addition to renting the condo for 100 days, Alexa uses the condo for eight days of personal use. Also assume that Alexa receives $30,000 of gross rental receipts. Answer the following questions:

a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.

b. What is the total amount of from AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.

c. Would Alexa be better or worse off after taxes if she uses the Tax Court method of allocating expenses?


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