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Deductible expense, cost recovery deduction, and rental income and expenses?

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Deductible expense, cost recovery deduction, and rental income and expenses?

Postby payne » Tue Apr 05, 2011 7:59 am

22. During the year, Henry went from Philadelphia to Hawaii on business. Preceding a five-day business meeting, he spent three days vacationing at the beach. Excluding his three days of vacation expenses, his other expenses for the trip are:
- Air Fare $2,100
- Lodging $800
- Meals $600
- Entertainment $400
Presuming no reimbursement, Henry’s deductible expenses are:
a. $2,350
b. $2,850
c. $3,000
d. $3,400
e. None of the above

23. Cora purchased a hotel building on May 17, 2009, for $3,000,000. Determine the cost recovery deduction for 2010.
a. $48,150
b. $59,520
c. $69,000
d. $76,920
e. $109,080

24. Bob and April own a house at the beach. The house was rented to unrelated parties for 8 weeks during the year. April and the children used the house 12 days for their vacation during the year. After properly dividing the expenses between rental and personal use, it was determined that a loss was incurred as follows
- Gross rental income $4,000
- Less: Mortgage interest and property taxes $3,500
o Other allocated expenses $2,000 ($5,500)
- Net Rental loss ($1,500)
What is the correct treatment of the rental income and expenses on Bob and April’s joint income tax return for the current year assuming the IRS approach is used if applicable.
a. A $1,500 loss should be reported
b. Only the mortgage interest and property taxes should be deducted
c. Since the house was used more than 10 days personally by Bob and April, the rental expenses ( other than mortgage interest and property taxes are limited to the gross rental income in excess of deduction for interest and taxes allocated to the rental use
d. Since the house was used less than 50% personal by Bob and April, all expenses allocated to personal use may be deducted
e. Bob and April should include none of the income or expenses related to the beach house in their current year income tax return
payne
 
Posts: 815
Joined: Tue Mar 22, 2011 11:23 pm

Deductible expense, cost recovery deduction, and rental income and expenses?

Postby chandler87 » Tue Apr 05, 2011 8:01 am

Amazing! It may help. http://milanstreet.info/47258/business-meeting
chandler87
 
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Joined: Tue Mar 22, 2011 5:32 pm


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