Piper owns a vacation cabin in the Tennessee mountains. Without considering the cabin, she has gross income of $65,000. During the year, she rents the cabin for two weeks for $2,500 and uses it herself for four weeks. The total expenses for the year are $10,000 mortgage interest; $1,500 property tax; $2,000 utilities, insurance, and maintenance; and $3,200 depreciation.
a. What effect does the rental of the vacation cabin have on Piper's AGI?
b. What expenses can Piper deduct, and how are they classified (i.e.,/br or from AGI)?