Question $1(10$ points$)$

In the current year, Jim M$.$ purchased a condominium in Hilton Head Island, South Carolina. Jim M$.$ and his family used the condominium for a total of $45$ days. The condominium was rented out a total of $90$ days during the year, generating $$7,500$ of rental income. Jim incurred the following expenses: Property taxes $$5,400$; Mortgage interest $$2,600$; Insurance $$1,500$; Utilities $$2,750$; Depreciation $$10,000.$

Requirements $($show computations and provide explanations. No abbreviations$)$

Determine Jim's deductible expenses and net income$/$loss using the Tax Court approach.

Describe how the amounts not allocated to the vacation home are treated.

Assume the rental income was $$3,000,$ determine the deductible expenses using the Tax Court approach.

Using the facts as $(3),$ describe how amounts not allocated to the vacation home are treated for tax purposes