[lonestar]

Taxpayer rents his condominium for 129 days for $2,000 and uses it himself for 60 days. The rest of the year it is vacant. His expenses are

Mortgage interest $1,800

Real estate taxes 600

Utilities 300

Maintenance 300

Depreciation 2,000

Total 5,000

Taxpayer may deduct the following expense:

Rental expense Itemized deduction

Mortgage interest $1,200 $600

Real estate taxes 400 200

Utilities 200 —

Maintenance 200 —

Depreciation — —

Total $2,000 $800

I understand that since personal use exceeds 14 days or 10% of rental use, therefore deduction is further limited to rental income less otherwise deductible interest, tax, and casualty loss.

Then, shouldn’t the deduction be Rental income of $2,000 less ($1,200+400), which is the “otherwise deductible interest, tax, since there is no casulaty loss”? Therefore, the deduction is $400, instead of $800?

Where am I wrong? Please telll me. Thanks much!

[lonestar]

BUMP. I'm in need help of this question. Might seem very easy on me. Kindly enlight me!!!

[lonestar]

I mean might seem very easy on YOU, NOT ME.

[Anonymous]

I exactly don't understand what you want to ask ,
but I can tell you that we can itemized the home mortgage loan interest and the rental estate taxes
so the balance which we unable to deduct due to the income limitation can claim as itemized deduction.
We cannot itemized the depreciation , utilities, and maintenance
so total mortgage interest and estate tax =$2400
you deducted $1600 so 800 you can claim as itemized deduction.

[Shovel]

On Sch E, the taxpayer can deduct 2/3 (129/189 days) of the allocable expenses. The depreciation expense is limited in this case because the net income is already $0 ($2000 income – 1200-400-200-200 expenses). Total expenses claimed on Sch E = $2,000.

On Sch A, the taxpayer can deduct 1/3 (60/189 days) of mortgage interest and taxes paid. You can't deduct utilities and depreciation on Sch A. Total expenses claimed on Sch A itemized deductions = $800 (600 + 200).

AUD 11/15 91
BEC 1/16 83
REG 2/16 79
FAR 7/16

[lonestar]

@Ano @Shovel

Thanks BOTH very much!!! I also looked up IRS website. But what you both said made it much easier for me.

[Author]

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