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Dennis receives $13,350 during the current tax year from Blanca for some office space in Anaheim, California.
The rent covers eight months, from August 1 of the current year to March 31 of the following year.
The amount also includes a security deposit of $1,875. How much should Dennis report as rental income in the current tax year?
 
$1,575.
$7,125.
$11,475
$13,350.
 
13350 – 1875
   
James owns a home in Lake Tahoe, Nevada, that he rented for $1,650 for two weeks during the summer.
He lived there for a total of 120 days, and the rest of the year the house was vacant.
The expenses for the home included $6,100 in mortgage interest, $920 in property taxes, $1,350 in maintenance and utilities, and $2,560 in depreciation.
How much rental income from the Lake Tahoe home would James report for the current year?
 
Multiple Choice
 
$0
$593.
$1,650.
$9,280.
 
Under 15 days.
   
Sean and Jenny own a home in Boulder City, Nevada, near Lake Mead.
During the year, they rented the house for 40 days for $3,300 and used it for personal use for 18 days.
The house remained vacant for the remainder of the year.
The expenses for the house included $14,225 in mortgage interest, $3,590 in property taxes, $1,250 in utilities, $1,360 in maintenance,
and $11,050 in depreciation. What is the deductible net loss for the rental of their home (without considering the passive loss limitation)?
Use the Tax Court method for allocation of expenses.
 
$0.
$454.
$8,165.
$28,175.
 
14225 + 3590 = 17815 x 40/365 = (1952)
1250 + 1360 + 11050 = 13,660 x 40/58 = (9421)
0 - can't show a loss
   
James owns a home in Lake Tahoe, Nevada, that he rented for $6,300 for 40 days during the summer.
He lived there for a total of 120 days, and the rest of the year the house was vacant.
The expenses for the home included $6,850 in mortgage interest, $1,240 in property taxes, $1,980 in maintenance and utilities, and $3,690 in depreciation.
What is his net income or loss from the rental of his home (without considering the passive loss limitation)?
Use the IRS method for allocation of expenses.
 
$0.
$2,860 net income
$6,300 net income.
$7,460 net loss.
 
6850 + 1240 + 1980 + 3690 = 13760 x 40 / 160 = 3440
6300 - 3400 = 2860
   
Ginny owns a house in northern Wisconsin that she rents for $1,800 per month.
Ginny does not use the property personally. While she was in Europe for Christmas, the water heater on the property failed,
and her tenants repaired it for $1,260. For the following month’s rent (January), her tenants paid her $540 for rent ($1,800 - $1,260).
What amounts should Ginny include for rental income and repair expense, respectively, for January?
 
$540; $0.
$1,260; $540.
$1,800; $540.
$1,800; $1,260
 
1800 = Rental Income
1260 = Deduction
   
On August 1 of the current year, Jennifer and Tyler purchased a cabin for $2,750,000.
Of that amount, $1,400,000 was for the land.
How much depreciation deduction can Jennifer and Tyler take in the current year assuming that the cabin was rented starting on the purchase date?
Use Table 6A-6.
 
$0.
$18,414
$21,141.
$40,916.
 
$2,750,000 - $1,400,000 x 1.364% (.01364)
   
Nicolette and Brady own a cabin in Lake Arrowhead, California, that they rent out during the winter and use the rest of the year.
The rental property is categorized as personal/rental property, and their personal use is determined to be 68% (based on the IRS method).
They had the following income and expenses for the year (after allocation):
                                                 
Gross rental income        $                             10,200  
Interest and taxes                                             6,350     
Utilities and maintenance                             2,710     
Depreciation                                                      5,000     
 
How much can Nicolette and Brady deduct for depreciation expense related to this property for this year on their tax return?
 
$0.
$1,140
$5,000.
Answer cannot be determined.
 
10,200 - 6,350 - 2,710 = 1,140
   
Jermaine owns a rental home in Lake Tahoe and traveled there from his home in San Francisco for maintenance and repairs three times this year.
The round trip from San Francisco to Lake Tahoe is approximately 182 miles.
How much travel cost can Jermaine deduct for the current year related to the rental home in Lake Tahoe?
 
$96.
$0.
$292
$290.
 
182 x 3 x .535
   
All advance rental payments received, including security deposits for a rental property, must be reported as income when received.
 
A) True
B) False
   
Alexis' cabin in the mountains that was rented for 125 days and used by her for 12 days is considered personal/rental property.
 
A) True
B) False
   
Joey and Susan rented their house for 2 weeks and used it for personal use for the remainder of the year.
The house is considered personal/rental property.
 
A) True
B) False
   
A taxpayer may use a Schedule C or a Schedule E to report royalty income.
 
A) True
B) False
   
In general, losses from passive activities may be deducted only to the extent that there is passive income.
 
A) True
B) False
   
Which of the following statements is incorrect concerning rental properties?
 
A) Generally, rental activities are reported on Schedule E.
B) All ordinary expenses related to the rental activity are deductible.
C) Capital improvements may be deducted as expense in the year the improvements are made.
D) Travel expenses related to the rental activity are calculated using the standard mileage rate.
   
On June 1st of the current year, Kayla and Ralph purchased a rental beach house for $700,000. Of that amount,
$400,000 was for the land value. How much depreciation deduction can they take in the current year?
(You may need to refer to the depreciation tables.)
 
A) $0.
B) $5,910.
C) $7,880.
D) $13,790.
   
On June 1st of the current year, Nancy and Dean purchased a rental beach house for $1,200,000.
Of that amount, $800,000 was for the land value. How much depreciation deduction can Nancy and Dean take in the current year?
(You may need to refer to the depreciation tables.)
A) $7,880.
B) $14,545
C) $15,760
D) $23,640
A) $7,880.
   
Jackson owns a condominium in Las Vegas, Nevada, and he rents it to Joanne for $1,500 per month, payable on the 1st of each month.
While he was out of town in August, the condo's air conditioning broke and Joann had it replaced for $1,350.
How much rental income does Jackson report for September if Joanne deducts the repair cost from her rent for September?
 
A) $0.
B) $150.
C) $1,350.
D) $1,500.
   
Eddie and Camilla received $11,600 for the rental of their rental house in Irvine, California. Eddie and Camilla do not use this property for personal use.
The rent covers six months from October 1 of the current year to March 31 of next year. The amount also includes a security deposit of $2,000.
How much should Eddie and Camilla report as rental income in the current tax year?
 
A) $2,000.
B) $9,600.
C) $11,600.
D) $13,600.
   
Lori and Donald own a condominium in Colorado Springs, Colorado, that they rent out part of the time and use during the summer.
The rental property is classified as personal/rental property and their personal use is determined to be 75% (based on the IRS method).
They had the following income and expenses for the year (before any allocation):
How much net loss should Lori and Donald report for their condominium on their tax return this year?
 
A) $0.
B) $3,350 loss.
C) $7,400 loss.
D) $9,000 loss.
   
A property that has been rented for 120 days and used for personal use for 40 days should be categorized as:
 
A) Primarily rental.
B) Primarily personal.
C) Personal/rental.
D) All of the above are correct.
   
Julian and Nina own a home in Napa Valley, California, and rented it for 14 days for $10,000 to a large corporation.
The rest of the year, they lived in the home. What is the proper tax treatment of the $10,000 they received?
 
A) The amount should be reported on Schedule E.
B) The amount should be reported on Schedule C.
C) None of the rental income should be included in gross income.
D) The amount should be reported as other income.
   
Richard owns a cabin in Utah that he rented for $4,000 for 21 days. He lived there for a total of 120 days.
The expenses for the home included $8,000 in mortgage interest, $1,200 in property taxes, $1,300 in maintenance and utilities, and
$3,500 in depreciation.
How much net income or loss from the Utah home would Richard report for the current year
(use the IRS method)?
 
A) $0.
B) $1,915 net income.
C) $4,000 net income.
D) $10,000 net loss.