2- 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:

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Mortgage interest Property taxes Insurance Utilities Repairs Depreciation $ 4,500 1,200 1,800 2,300 1,500 6,500 Required: a. What is the tax treatment of these items relating to second home under Tax Court allocation method? b. What is the tax treatment of these items relating to second home under IRS allocation method? c. Which of the methods is preferred? Mortgage interest Property taxes Insurance Utilities Repairs Depreciation $ 4,500 1,200 1,800 2,300 1,500 6,500 Required: a. What is the tax treatment of these items relating to second home under Tax Court allocation method? b. What is the tax treatment of these items relating to second home under IRS allocation method? c. Which of the methods is preferred?

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To determine the tax treatment of the expenses relating to Randolph and Tammys second home under bot... View the full answer